If you are one of the thousands of Florida residents currently struggling to pay your mortgage, you may be wondering what your options are. For many, their best option is to return the home to the bank and start over, but you may consider having a deficiency judgment brought against you for the outstanding balance.
At our firm, we work with individuals in these circumstances every day by assisting them in getting a deficiency judgment waiver. This solution will eliminate the remaining debt owed on your home if the bank agrees.
What is a Deficiency?
In situations where a homeowner sells their home for less than what they still owe on their mortgage, a deficiency occurs. This financial gap is usually due to a short sale, foreclosure sale, or deed in lieu of foreclosure scenario. For example, let’s say your mortgage has a balance of $175,000 left to pay off, but you’re underwater on payments, and the bank forecloses. When the home is later sold in a foreclosure sale for $125,000, this leaves $50,000 due.
Anytime a home sells for less than what is due to the lender, the remaining amount is considered a deficiency, and they can sue you for that amount plus associated fees spent to collect it. If the bank wins their case, the court will hand down a deficiency judgment against you.
So, if you decide to walk away from your home through any of the methods mentioned earlier, you need to protect yourself from the legal consequences. Worse, there isn’t a time limit for how long a lender can wait to pursue you for this money, and it’s not uncommon for these institutions to wait until you’re back on your feet before taking action. They may even be able to have the judgment include any accrued interest on the money they are owed! This is why you should first speak with a knowledgeable Florida foreclosure defense attorney to find out how you can potentially avoid paying any of the remaining balance.
Will My Lender Agree to a Deficiency Judgment Waiver?
The idea that a lender would walk away from owed money seems preposterous. However, they do this all the time. Many times, the remaining balance isn’t worth pursuing when they determine how much it will cost them in legal fees and collection actions to get it paid. Plus, many banks will eventually resell the property anyway, so they want you to leave without hurting the home’s condition.
As you can see, there are countless reasons for waiving a deficiency judgment against a defaulted mortgage account. If your lender is willing to waive their rights to pursue the remaining balance on your loan, make sure your attorney adds this language to any short sale or foreclosure agreements. However, this option does not eliminate your tax liabilities for the mortgage debt they remove.
Seek a Reputable Florida Foreclosure Defense Attorney Now
Knowing the ins and outs of Florida foreclosure law is impossible without the proper training and experience. If you haven’t defaulted on a mortgage before, you may not realize the risk you run of having a deficiency judgment brought against you. Working with a seasoned foreclosure defense attorney is crucial in minimizing or potentially having the outstanding balanced owed on your home waived by the bank.
At the law offices of Marc Brown, P.A., we regularly represent cases involving homeowners who short sell or surrender their homes to stop foreclosure actions and settle their mortgage liabilities. Our legal team does everything possible to minimize this process’s impact on your credit and explore every possible avenue to reduce your debt. For over a decade, we have had great success helping individuals with underwater home loans get the financial relief and new start they need.
To schedule a no-cost legal consultation regarding foreclosures and deficiency judgments, call the law offices of Marc Brown today.