Deficiency judgments a second nightmare for those fighting foreclosure in Miami

March 31, 2011

It is not an exaggeration at this point to call the nation's foreclosure crisis the largest consumer products catastrophe in our nation's history. If you are dealing with a foreclosure in Miami, or are seeking a home loan modification, short sale or defense of a deficiency judgment, we implore you to seek the advice of a qualified attorney.

Our foreclosure defense attorneys note the recent report in the St. Petersburg Times, which outlines why consumers could be on the hook for deficiency judgments for up to 20 years.
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We have reported on our Miami Foreclosure Lawyer Blog that the government is moving to kill the mortgage assistance program meant to help struggling homeowners. Banks refused to cooperate -- only $1 billion of the $50 billion was ever allocated for mortgage relief. In some cases, banks approved trial modification, only to later reject the agreement and use the arrears as a reason to foreclose.

In March, we reported why irresponsible lending caused the foreclosure crisis. Still, banks have been given a pass. Even with criminal investigations in all 50 states over allegations that banks forged mortgage documents, it's business as usual.

It is a virtual certainty that, just as soon as they can turn their attention to it (that means when they are done reaping billions from homeowners through foreclosure), they will begin pursuing deficiency judgments against those who lost their homes.

The worst of it is that these deficiency judgments will come back to haunt people who thought their problems were over. If you owed $200,000 on your home and the bank foreclosed and sold it for $100,000, it could seek to recoup the additional $100,000 from you.

The deficiency action can be brought by a primary or secondary mortgage holder, or by a mortgage insurance company or government entity like Fannie Mae and Freddie Mac. In Florida, a deficiency can be filed for up to 5 years -- and, once granted, a creditor has up to 20 years to collect.

Many of the deficiency judgments come in the mail. A borrower who fails to update his or her address could miss the notice and lose the chance to challenge the motion. Wages can be garnished. Even cases of short sale may result in a deficiency judgment unless a homeowner negotiates a waiver of the right as part of the agreement with the bank.

If you need help with foreclosure issues in Miami or the surrounding areas, including short sales, deficiency judgments, strategic defaults or other help for Miami homeowners, contact Bruce Jacobs & Associates for a confidential appointment to discuss your rights. Call (305) 358-7991.

St Petersburg Times_ Deficiency judgments let creditors haunt borrowers for up to 20 years.pdf