Will deficiency judgements on a Fla. home (not primary residence) effect other vacant parcels of land owned free and clear in Fla. and NC?

Asked by David, 33908 Wed Mar 10, 2010

This is a follow up question to the lender holding me hostage for 13k.

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Danielle Sha…, Agent, Cape Coral, FL
Wed Mar 10, 2010

Thanks for answering that!!! I was going to refer him to you after all that AWESOME info you gave me on Tuesday.
1 vote
Chris Black, Other Pro, Fort Myers, FL
Wed Mar 10, 2010
You need to seek independent and local counsel to determine the extent of your exposure and of your future liability.
A deficiency judgment derived from an obligation here in Florida will affect the title to property the debtor owns. For example, if your vacant parcels are in Lee County and the creditor files the judgment in the public records of Lee Co., that judgment will become a cloud on the title of that vacant parcel. You should therefore seek independent counsel locally (i.e., here in Florida) to determine if there are any ways to minimize the impact of the deficiency judgment if it is inevitable. Local counsel may also be able to work on setting aside or negotiating away that judgment.
With respect to the North Carolina property, you should definitely seek out counsel in N.C. who understands the susceptibility of your assets there to a judgment dervied from dealings in Florida. Asset protection laws vary greatly from state to state. It is therefore imperative that you understand the potential outcomes in N.C. as well. Generally speaking, it is quite simple for a creditor to take a judgment from here in Florida and file it in another jurisdiction.
Like Nancy, I am happy to recommend local counsel here in Florida. Best of luck.
Chris Black
8695 College Parkway, Suite 1041
Fort Myers, Florida 33919
P: (239) 985-4142
F: (239) 425-3518
W: http://www.wingedfoottitle.com
W: http://www.shortsaletitlesolutions.com
1 vote
Craig Brezina, , Naples, FL
Fri Sep 17, 2010
Hey Bro,
Yeah, you better get an attorney to take a look at the situation. I'm pretty sure they can go after other assets that you may own, but get an attorney. Most banks are not seeking deficiency judgements right away but they have something like seven years to do so.

Good Luck David!
Web Reference:  http://ftmyerscraig.com
0 votes
Pam Wittenau…, Agent, Fort Myers, FL
Tue Aug 31, 2010
Hi David,
I would contact an attorney and they usually give you several options. I have known clients who have been through this and one did not affect the other. You can call me at 239-989-7077.

Pam Wittenauer
Exit Platinum Realty
0 votes
Mott Marvin…, Agent, Sunny Isles Beach, FL
Thu Mar 11, 2010

I've read some of these answers and obviously the opinions vary dramitically. I am under the impression that a lender could place a lien on other holdings. But now, I am not so sure.

Here are some things I found on-line, the link to the full article is below...

1. The lender can obtain a judgment against you to recover the deficiency. He has to file a separate motion/lawsuit for a deficiency once the foreclosure sale is complete. The court then holds a hearing to decide if a deficiency judgment can be allowed against you. At the hearing, the lender has to prove that the property value is indeed less than what you owe.

2. Deficiency judgment Florida allows lenders to come after your wages, levy your bank accounts and put liens on your other properties. However, there are certain assets which are exempt from judgments. They include IRA, 401k, other retirement accounts, social security income, unemployment benefits, workers compensation, etc. Your lender has the right to collect on that judgment for 20 years. The interest will accrue every year till it is paid in full. Apart from this, the judgment will show up on your credit report for 7 years and will affect your credit scores adversely.

3. Homestead properties are not protected from judgments for mortgage liens. You can protect your home from creditors of unsecured debts under homestead protection. But lenders, who have financed purchase, repair, improvement, etc. of your home, hold a lien on your property. If you default on such secured loans, your home is not protected from judgments.

≈≈≈ Mott Marvin Kornicki, REALTOR® ≈≈≈
Aventura | Bal Harbour | Sunny Isles Beach
≈≈≈≈≈≈ "★” This is the House “★" ≈≈≈≈≈≈
0 votes
Bob Movin-On, , Hartford, CT
Thu Mar 11, 2010
If the lender truly has a judgment they have every right to go after anything you own or earn until the judgment is settled. How aggressive the lender will get is the issue and you never know, first they need to search for the property, that costs money, then they need to file a lien on the property, that costs money, lastly they will need to file for foreclosure on the property, that costs money and the first mortgage holder will most likely keep that from happening.
The one issue you should be more concerned about is that they will file the deficiency judgment on your credit report, which will haunt you until it is settled. I would start a dialog with these people, let them know your financial position because chasing after money cost a lot of money and usually to no resolve and that's why they want money up front.
0 votes
Nancy Doyle, Agent, Cape Coral, FL
Wed Mar 10, 2010
Hi David,
They are both right. You need to contact an attorney and have them look at your paperwork. Yes the deficiency judgement could go after that person or company that is stated in the judgement and everything it owns, if and when it chooses to up to the statue of limitations. If that is what is stated in the judgement. You really need an attorney to look over it. Some banks are overwhelmed with the work load right now but that does not mean they will not do it later. You should always speak with a good attorney when doing a short sale or being foreclosed on. There is a lot of small print and verbiage that you need to understand. I had a client doing a short sale and referred her to an attorney to talk about the affects of doing it. When she found out the bank was going to go after the other properties she owned she chose not to do the short sale, and filed bankruptcy. If you would like the name of a good attorney in this area, I would be happy to give you their information; just let me know.

Best of luck,

Nancy Doyle
Web Reference:  http://www.nancydrealtor.net
0 votes
David Lang, Agent, Fort Myers, FL
Wed Mar 10, 2010
The deficiency judgment is filed on a person, not a property. If the deficiency judgment is filed on a person because of a foreclosed property, the judgment follows the person even though they do no own the property any longer. It will effect your credit and ability to get credit.
I hope this helps.

David Lang
Keller Williams Realty

0 votes
..., , Lexington, MA
Wed Mar 10, 2010
That's best discussed with your attorney but in general a deficiency judgement would have no impact on other holdings. It would, however, have a huge impact on your credit.
0 votes
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