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Jacqueline Alicia Salcines

WHAT IS A DEFICIENCY BALANCE IN FLORIDA

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Florida was one of the states most hardest hit in the economic downturn. Property values plummeted and that reduction in value, caused many property owners and borrowers to lose their homes. That reduction in value is what lenders seek to recuperate whey they pursue deficiency judgments in the foreclosure process.

DEFICIENCY JUDGMENTS AFTER FORECLOSURE

A Foreclosure does not automatically create a deficiency judgment in the state of Florida. The foreclosing party may obtain a deficiency judgment as part of the foreclosure action, by filing a separate lawsuit for the deficiency after the foreclosure has ended.

As of July 1, 2013, the period of time in which the lender can pursue the deficiency was reduced from five years to one year for residential properties with no more than 4 dwelling units. The one year time frame starts on the day after the court clerk issues a Certificate of Title to the buyer in the foreclosure auction.

PROMISSORY NOTES AND MORTGAGES

When you take out a loan to purchase property, there are two documents included in the lender package that are signed by the borrower. The note and the mortgage. The promissory note is the promise to pay the loan back. The mortgage is just the pledging of the property as collateral in case the borrower defaults on the note. A default occurs when the borrowers does not pay as agreed pursuant to the terms of the promissory note.

WHO IS AT RISK?

Homeowners who chose to either strategically default and do nothing on their loans, and faced foreclosure, due to the property loss of value, are at risk. Or borrowers who entered into a short sale transaction and the attorney or realtor who negotiated the short sale, did not obtain a deficiency waiver as part of the approval terms. The short sale approval must expressly state that the lender is waiving the deficiency, or right to go after the borrower post closing. Do not confuse this with language "the lender will release the lien". A release of lien does not guarantee a deficiency waiver but rather complies with the title requirements to remove the mortgage from the title. But a release of lien does not let the borrower off the hook. Without the proper language, the borrower may be at risk.

FOR MORE HELP

At the Law Offices of Jacqueline Salcines, P.A., we represent homeowners struggling to pay their mortgages. Whether you have stopped making mortgage payments or are about to, and want to strategically default, we are here to help. We have a great deal of success negotiating settlements for property owners that wish to keep their home or in the alternative, live in the home for as long as possible until a short sale or deed in lieu is negotiated. Both negotiations, once done properly, should result in the lender waiving the deficiency balance and offering the seller a forgiveness of a portion of their loan. On short sales, the seller may even walk away with $10,000 if processed as a HAFA short sale under the Making Home Affordable Program.

If you are a Florida property owner, call and speak to attorney Jacqueline Salcines, Esq. today. As both a real estate/litigation attorney and accountant, she is well versed in handling all matters pertaining to mortgages and balances and has over 15 years experience in the mortgage and real estate field.

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