Although deficiency claims were once few and far between, with home values deteriorating over the years, lenders are much more mindful. They carefully monitor the take back of money they lose through foreclosures, short sales, and deeds in lieu of foreclosure. A mortgage lender can make a deficiency claim against a borrower when there is a foreclosure and the amount that the borrower owes on the property is more than the property is worth. It is important to note that this amount owed also includes attorney fees and court costs.
The lender needs to be sure to follow the deficiency claim process that is defined by Florida law. In Florida, a lender will have to file a claim within one year of a foreclosure because a foreclosure does not automatically lead to a deficiency judgment. To begin the process, a motion stating the value of the property and the amount the borrower owes needs to be presented. The borrower will have the opportunity the dispute the lender’s evaluation and this will lead to an evidentiary hearing where the lender will need to present evidence of the property’s worth.
In addition, the state of Florida offers lenders two opportunities to file for a deficiency judgment. As previously stated, the first opportunity is within one year after the foreclosure date. The second opportunity is that the lender has up to five years after the foreclosure sale to initiate a deficiency claim.
If you are in this predicament, consider speaking to a real estate attorney. They have the knowledge and resources to help you.
Stephen K. Hachey, a Florida real estate attorney, can help your wade through this process and determine a positive solution. Contact him at 866-200-4646.
The opinions in this post are solely those of the author. The author takes full responsibility for the content. Like all blog posts, this is offered for general information purposes and does not constitute legal advice.