Deficiency judgement in Florida

In the state of Florida much like other states around our country, foreclosure rates are sky high. Many people facing financial difficulties can no longer afford their mortgage payments and are in great danger of losing their home. One big problem most of these borrowers are worried about is the lender suing them for the deficiency balance of the loan.

What is a deficiency judgement?

If you have lost your home due to foreclosure and your home is not worth as much as the remaining balance of the loan, the lender may come after the borrower for the difference. Lenders may do this to make sure that the loan is paid back in full. The value of your home will be determined on the actual date of sale.

Due to our economic crisis the value of homes across America has hit rock bottom. A house that was worth $500,000 two years ago may now be worth as low as $300,000. But even though so many homes are going into foreclosure in Florida, not always does this result in the lender pursuing judgement against the borrower. In order for the mortgage lender to do this they must first file a motion to the courts after the sale, and than another court hearing will be held later on for the deficiency. 

In order to achieve this, the mortgage lender must provide the court with proof that the borrowers remaining loan balance is more than what their property is now worth. On the other hand, the borrower is allowed to provide their own evidence to prove their home is either worth as much as the loan balance or more. If the borrower proves to the courts that the home was valued more than the loan balance at the time of sale, the lender will have no right to pursue the deficiency balance.

Since the housing market has begun to crash, and with home values lower then ever before, the chances of your mortgage lender pursuing this is greater then before. Be careful when it comes to your expenses and do everything possible to avoid foreclosure.