If you are a homeowner facing foreclosure, you may be surprised to find that your legal troubles do not necessarily end once your home has been foreclosed.
What are Deficiency Judgments?
Florida law permits mortgage lenders to obtain a deficiency judgment against you in the event the fair market value of your home is less than the total amount you owe to the lender on the home. Lenders have one year from the date of the foreclosure sale to seek a deficiency judgment against you.
Who Should Be Concerned About Deficiency Judgments?
Deficiency judgments are a concern in the wake of the housing crisis of 2008, during which home values dramatically fell, resulting in negative equity for many homeowners. In South Florida, some homes lost 30 percent or more of their value, leaving those homeowners in danger of deficiency judgments on top of the loss of their home and damage to their credit scores.
Beware Actions from Second Mortgage Lenders
While most first mortgage lenders have opted to negotiate with homeowners to keep them in their homes before foreclosing or seeking deficiency judgments, second mortgage lenders have increasingly sought to sue borrowers for default. Thus, homeowners who are underwater in their mortgage must proceed carefully to avoid additional legal and financial loss in the aftermath of a foreclosure.
Hire a Foreclosure Defense Attorney to Protect Your Interests
By working with an attorney to represent you in defending against a foreclosure, you maximize your chances of keeping your home and minimizing your financial losses. An experienced attorney can assist you in taking the action that best protects your interests, including obtaining a loan modification, defending against or settling a deficiency claim, or pursing bankruptcy. If you are facing foreclosure and have negative equity in your home, you should contact us to discuss your foreclosure defense options.
