A new law in Florida passed in 2013, seriously limits the time frame a lender can pursue a deficiency judgment against a borrower in Florida. A deficiency judgment is the difference between the Final Judgment award to the lender on the recorded final judgment document and the amount recuperated by the lender after the foreclosure sale of the property. For example, if a final judgment is for $400,000.00 and the lender obtains $100,000 for the property at the foreclosure auction of the home, the borrower is still on the hook for the $300,000.00 deficiency. Lenders can then file a new lawsuit against the borrower for the deficiency, or the $300,000.00
The new law however, limits the time to one year after sale. That is, once the sale takes place, they have exactly one year to file a lawsuit for the balance owed in the deficiency. The law also caps out the amount the lender can sue for. That is, it is no longer the $300,000.00 but rather the difference between the amount obtained at the sale ($100,000.00 in the example above) and the fair market value of the property AT THE TIME OF THE SALE. Not at the time of the deficiency lawsuit being filed.
At a recent View from the Bench seminar attended by attorney Jacqueline A. Salcines, Esq., various Judge’s provided insight as to what they are looking for as far as evidence of value. That is, a “certified appraisal” will hold more weight than a CMA or report prepared by a realtor, said Judge Freeman.
Therefore, in order to fight and defend such deficiency lawsuits in Florida, the best defense is a knowledgable attorney by your side. If the lender is outside the one year mark for the deficiency lawsuit then this defense if well pled, will get the lawsuit dismissed.
If the values are incorrect, then this will act as another defense to have a deficiency judgment lawsuit dismissed or reduced.
And at the end, even if there are no defenses, negotiation is always an option. Often these lenders will settle for pennies on the dollar if the borrower is insolvent, owns no assets or does not have any property that can be levied. This is evidenced by providing a properly prepared financial worksheet to the lender.
At the Law Offices of Jacqueline A. Salcines, PA, our knowledgable attorney Jacqueline A. Salcines, PA has the tools and experience to defend these suits and obtain the best possible outcome for our clients. As both an accountant and real estate lawyer, Jacqueline A. Salcines, P.A. has been defending these suits and practicing law for over 15 years. Put our experience to the test.
The first consultation is always free and can provide the information and options you are seeking. Call us today.
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Jacqueline A. Salcines
