The simple, straight to the point answer is YES! You should be worried about a deficiency judgment if you are currently in foreclosure or in default on your mortgage. Being in foreclosure or default has a high risk of you losing your home, but it also has a high risk of a judgment being entered against you.
This is a Deficiency Judgment--when a real estate property is foreclosed upon in Florida, the property is sold at a foreclosure sale. If the property owner owed $200,000 on her mortgage when she was foreclosed upon, and the property is only sold for $100,000 at the foreclosure sale, then the lender/bank can obtain a deficiency judgment for $100,000. A court order is entered stating the property owner owes the lender/bank $100,000. However, getting the deficiency judgment and actually collecting on it are two different beasts.
The lender/bank must obtain the deficiency judgment within 5 years of the mortgage going into default or of demanding payment. Also, a trial court has discretion whether or not to grant a deficiency judgment, and its decision must be based on established equitable principles, taking into account the specific facts of the case, and the decision is always subject to review by an appeal. Carlson v. Becker, 45 So.2d 116 (Fla.1950). The court must take into account the reasonable and fair market value of the property, and the reasonableness of the amount of the foreclosure sale. Savers Federal Savings & Loan Association v. Sandcastle Beach Joint Venture, 498 So.2d 519 (Fla. 1st SCA 1986). "The granting of a deficiency judgment is the rule rather than the exception." Flagship State Bank of Jacksonville v. Drew Equipment Co., 392 So.2d 609 (Fla. 5th DCA 1981).
If you are facing foreclosure, there may be steps you can take to ensure you do not get stuck with a deficiency judgment. Contact a Jacksonville Foreclosure Defense Lawyer or a Jacksonville Bankruptcy Lawyer today for a free case review to evaluate your defense options.
