Cape Coral Florida's Real Estate Guide

Have you modified your home loan terms through your lender or a third party counselor?

Has your home been foreclosed upon and sold at auction?

Have you sold your home via a short sale to avoid foreclosure?

If your answer is yes to any of the above questions then you need to know about deficiency judgments. A deficiency judgment is the amount between what the bank was able to get for your home and the total mortgage owed. In many states, banks have the right to sue you for difference between the two amounts. Not every homeowner who goes through a foreclosure ends up with a deficiency judgment and not every homeowner who gets their loan modified is in the clear. It is very hard to determine in advance whether you will be faced with a deficiency judgment.

If your house is actually foreclosed upon and sold at a Sheriff's auction, the bank may be able to pursue a deficiency judgment against you. In Florida, banks are permitted to pursue a deficiency judgment against you under certain circumstances. However, even when the circumstances permit it, the bank does not always pursue the deficiency judgment. It has already cost the bank thousands of dollars to foreclose on your home. In addition to that, they have already lost the amount of the deficiency. If the home was your primary residence and not an investment property, the bank assumes that you would have continued to make your payments had you had the resources to do so. Therefore, it would not make sense for them to file a deficiency judgment against you. It would just cost them additional money in attorney's fees and they will not be able to collect that either.

However, the banks know that there are some people that it makes sense to go after. An investor who walks away from a property might have other property, including their residence, to attack. If the bank does file for a deficiency judgment, they can execute against your property and get a wage garnishment to take up to half of your earnings. Many people who find themselves with a deficiency judgment file for bankruptcy protection.

If you have recently been through a foreclosure or short sale and are looking for a property in Cape Coral, Ft. Myers, Bonita Springs or Estero to rent until you are able to buy again, contact me to help you find a great rental property that fits your needs and budget.