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The Probability of Lenders Pursuing a Deficiency Judgement

With an unstable economy and the crash of the real estate market still haunting homeowners and lenders years later, foreclosures continue to be a serious problem for homeowners who have fallen behind on mortgage payments. Not only is the actual foreclosure process painstaking, homeowners may still struggle against lenders even after losing their homes.

After a lender has foreclosed on the home, if the amount that is owed on the home is more than the value of the home, the lender can come after the homeowner to collect the difference by making a deficiency claim. Although many lenders previously did not pursue deficiency claims after a foreclosure, when property values began rapidly declining more and more foreclosed homes were not worth nearly what was owed on them. Deficiency claims then began to rise so that lenders could start to recoup lost funds.

Under Florida law, a lender can file a deficiency claim against a borrower up to one year after the date of foreclosure. However, once the foreclosed property sells, lenders have another five years to pursue a deficiency claim against the former homeowner. Unfortunately, the Florida real estate market has not quite recovered and Florida property values continue to decrease, making Florida homeowners more likely to face deficiency judgments if they become delinquent in making payments.

If you are a homeowner who has fallen behind on your mortgage payment or if your home is the subject of a foreclosure, it is critical that you consult with an experienced real estate attorney who may be able to help you avoid foreclosure or deficiency judgment. Being threatened with a foreclosure may leave you feeling like there is nothing you can do to save your home, but an attorney will be able to analyze your case and figure out a strategy for the best and worst case scenarios.

If you’ve already been through a foreclosure, receiving notice of a possible deficiency judgment can feel like the straw that broke the camel’s back, but you don’t have to continue to fight by yourself. Speak with an experienced real estate attorney today to learn more about your potential options.

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. 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.