Deficiency exposure occurs when a disagreement lies between the price of the home and the amount owed to the lender. It is calculated by subtracting the price of collateral property from the total debt of the borrower.
A deficiency judgment can be created by a lender to collect any deficiency exposure from their borrower. The time limit to pursue a judgment against the borrower is one year, but can be easily done through a filing motion in the foreclosure case or a lawsuit against the borrower.
Those with a deficiency exposure can defend themselves against a filed claim, whereas individuals who do not have deficiency exposure can find themselves being pressured by the lender to make their account current by making mortgage payments and paying late fees. An alternative to homeowners with deficiency exposure can be a bankruptcy claim. Filing bankruptcy can release any deficiency exposure.
In any situation it would be prudent to discuss your options with an attorney. The saying “the sooner, the better” is true when it comes to a deficiency exposure case because of the enforced timeline of the foreclosure case; an attorney can help you set up your options of action quickly and efficiently.
Stephen K. Hachey, a Florida foreclosure attorney, can help your wade through this process and determine a positive solution. Contact him at 866-200-4646.