Key facts on Florida’s deficiency judgments

Owning a home is a part of the American dream, and has been for decades. Unfortunately, due to life circumstances, that dream can turn into a financial nightmare.

In some cases, individuals may undergo the foreclosure process, and more times than not, they will face a deficiency judgment. There are a few key facts to know about this judgment type.

What it is

Though it is not an official part of the foreclosure litigation process, the deficiency judgment is a common occurrence post-foreclosure. In short, if the judgment amount that the mortgage lender receives from the foreclosure does not cover the full loan amount, the lender may seek a deficiency judgment.

A lender may seek this judgment as part of the foreclosure claim, or as a separate claim after the foreclosure process concludes. However, it is important to note that some Florida jurisdictions may not allow lenders to seek a deficiency as a separate judgment from the foreclosure claim. Also, in cases where lenders are able to pursue a deficiency judgment after the foreclosure litigation, there is a one-year timeframe in which they are able to submit a claim for properties that contain one to four units.

What it includes

The courts determine the deficiency judgment amount in accordance with the stipulations of Florida’s foreclosure act. As such, there are a number of aspects that the courts consider in determining the amount, including the following:

• Property value at foreclosure
• Mortgage note amount
• Interest
• Attorney fees

Be aware

As long as the property is in Florida, the Florida courts hold jurisdiction over the property. In other words, whether a buyer is a resident or not, as long as the property is in Florida, the deficiency judgment process may apply. These are a few key facts about the process, but as with any court process, it can be quite detailed.