Roy Oppenheim discusses Florida Deficiency Judgments
By Oppenheim Law on Deficiency Judgments, Florida Law, Foreclosure, Real Estate & Roy Oppenheim
Hi. This is Real Estate and Foreclosure Defense Attorney, Roy Oppenheim. I want to talk to you a little bit about deficiency judgments today. That’s kind of the term that no one really wants to talk about in the area of foreclosure defense. And it’s really the thing that, up until now, has receive not much attention in the legal community and in the real estate community as a whole.
A deficiency judgment is the amount of money that a bank or lender is entitled to after a foreclosure if the bank has not been fully paid for the loan. So for example, let’s say you had a $100,000 loan. At the foreclosure sale, the property sells for $50,000 or it gets valued at $50,000 after the foreclosure sale, you now owe the bank $50,000. And it was a little unclear what the banks were gonna do, if they were actually gonna start pursing folks. And we think the jury is now back. And we are starting to see banks aggressively starting to pursue deficiency judgments against those people who in fact who have been foreclosed in the past year or so. Until now, there hadn’t been much activity. And just starting recently, folks are calling us and we’re starting to defend them in post-foreclosure proceedings concerning deficiency judgments.
It’s a problem because 98% of the folks out there, until now, have decided not to defend their foreclosure and thought that if they just put their head in the sand, that in fact, the problem would just leave them and disappear. That’s clearly not the case. The fact is that a deficiency judgment, once it’s obtained against you, can last in the state of Florida for up to 20 years. It’s 10 years, and then the bank has the right to renew it for another 10 years. And so this thing could haunt you literally for an entire generation, for up to 20 years.
The other thing that’s really interesting, is that many states you can’t get a deficiency judgment. Those states are called “non-recourse states.” You have recourse states and non-recourse states. A non-recourse state is, for example, like California. If you do a mortgage in California, in that state, if you do have a deficiency, the banks cannot come after you because there is no concept of deficiency. In Florida and in many other states, if you in fact are underwater on your mortgage and they get a foreclosure judgment, subsequent to that judgment, they can get a deficiency. Those are called recourse states. Unfortunately, we’re in Florida. I represent folks in Florida. We are subject to deficiencies.
So needless to say, if you’re in foreclosure do not bury your head in the sand. Do what’s rational, hire an attorney. Get someone to advise you. There are options. You could do a [inaudible 00:02:37] foreclosure. You could do a mortgage modification. You may be able to file for bankruptcy. You may be able to do a modification. There are a whole bunch of options that you in fact have. And so we suggest that you exercise those options, and do what you have to do to make sure you don’t get hit with a deficiency judgment.
From the trenches, Roy Oppenheim. Thank you.