How to avoid a Florida deficiency judgment.




Did you know that if your Florida home forecloses, the lender can be granted a deficiency judgment and pursue you for their losses?

What is a Florida deficiency judgement?

A deficiency judgement is a court order allowing a lender to collect additional money from a debtor whose home has been foreclosed, when the foreclosure sale price isn't sufficient to pay off the entire debt.

So - If you owed $400,000 on your Florida home, didn't make the mortgage payments, and the home foreclosed and sold for $350,000…the missing $50,000 would be the amount of the deficiency. Florida state law allow lenders a year to sue for a deficiency judgement after foreclosure.

If you are facing foreclosure in Florida, your best bet to avoid a deficiency judgment is with a short sale.

A short sale allows you an opportunity to negotiate how the loan is settled and to ideally get this deficiency balance waived. Short sale approval letters specifically spell whether or not the deficiency is being waived, or whether retains their right pursue the deficiency. 

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Carefully review your short sale approval letter, and  if the terms are not to your approval, you may renegotiate.

As your short sale agent, I always seek to have the short sale approved at terms most beneficial to you - which would be to settle the account in full and have the deficiency balance forgiven.

There are some very rare situations in which the lender(s) will not waive their right to pursue a deficiency and then it will be your decision whether to proceed with the short sale or not.

A short sale negotiated by an experienced agent is your best chance of settling your Florida mortgage debt on your terms, preventing a foreclosure and having the deficiency balance forgiven.

I can't recommend Minna enough for a short sale! She eased my mind during the entire process and followed through 100% from day 1 to the closing. She and Jaime handled everything flawlessly. I am so grateful to Minna and Jaime for all that they did to help us through this process.


Last Updated on February 12, 2024 by Minna Reid


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