what are the consequences of a foreclosure on the primary residence in fl?

Asked by Help10, 34655 Tue Aug 3, 2010

The property is listed as a short sale, there are buyers but the bank does not accept less than a certain amount which is too high according to the area's market. In case of a foreclosure what are the consequences? Are wages garnished? Cars are taken away? Etc.?

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Gerard Carney, Agent, Spring Hill, FL
Fri Aug 6, 2010
First lets look at the Short Sale aspect of the home! If the short sale is still priced higher than the surrounding homes, have your Realtor do a CMA on the home. This would be a comparision made from Three on the market now of same type, size, within less than a mile from the home. Homes must be similar to as best as possible with values added or subtracted as needed to equalize the homes! The same Should be done for Homes pending sale (in contract at the moment) 2 to 3 of these homes should be used if possible, and 3 homes also that have sold in the past 3 to 6 months. These homes will determin to best of ability what the short sale home is worth. You may also go for an Appraisal but this will cost money, which is a lack of since you have the home in short sale. Have your Realtor present offers of a fair price for the home to the financial institution with the note that price represents close to fair market value, see CMA attached for more understanding of home value. The Bank will more likely come to reality if you do this.
However!!!!! The bank does not have to accept any reasonable offer in a short sale, and if they it may take 3 to 4 months before they tell you that they have accepted the price offered! The price though is not a concrete number, but you have to let the bank know that there is no hope of sale if they do not accept less than price quoted on the MLS. Short Sales are just that sold short of amount owed!
Should the home go into foreclosure, you will lose the home and the bank will gain the property as agreed in you original contract for that loan, if you had been paying Mortgage insurance because it was an 80% loan or more, then you must remind the bank that you have paid this insurance and they may claim on it! The Bank will eventually sell the home and will get an amount for it! You may be resonsible for up to 5 years after that should the bank go after you for any money's lost in the transaction, basically the difference of the loan amount at foreclosure plus fees the bank paid for the foreclosure process! t is not likely that the bank will go after wages, Cars, or personal Valuables, but filing a chapter 13 may put your mind sat ease. Best bet is to sit down with a Real Estate Attorney about this matter, the consultaion should be free, but a few hundred dollars for Good advice can save thousands down the road. Please note that note any attorney for this matter, you need one that specializes in Real Estate Law, in Pasco and Hernando David Carter seems to be a good option. Anyway all the best to youon this matter, very sorry you had to lose your home. I see so much of this in the last few years and it breaks my heart to see decent Americans get caught up in the careless practices that the banks did this decade!
2 votes
Alma Kee, Agent, Tampa, FL
Thu Sep 23, 2010
Here's an asset protection attorney and his website may help you answer some of your questions:


Hope this helps.
0 votes
Hannah Flieg…, Agent, Larkspur, CA
Wed Aug 4, 2010
Hi Help,

If your lender forecloses through a Lis Pendis then this means that they are going to use the Courts to take back the property and at the same time to obtain a deficiency judgment against you. You can appear in the court and argue that the deficiency judgment is invalid, etc. You would have the let the Judge decide in your favor or the favor of the lender. If the lender is successful in obtaining a judgment against you then can negotiate a settlement for the debt. The lender may have the legal right to place a lien on your name, garnish wages, etc. There is also the statute of limitations to consider and this is state specific, so check what the statute is in your state.
If your property is listed for a short sale, perhaps the buyers can kick in a little more money and you can kick in some as well and settle the full debt at the time of the sale and avoid the entire foreclosure deficiency thing.
Finally, if you are in real trouble financially and cannot pay towards closing and have a bunch of credit card debt as so many Americans do these days, then bankruptcy might be an option to consider. Bankruptcy is a strategy that is used to shake off the debt and gain debt relief. Something to consider.
Finally, you can return to homeownership quickly through Rent to Own programs, Lease Options or Seller Financing, You will be limited to bank institutional financing for 36 months FHA and do not let anyone scare you and tell you that you cannot get into homeownership for 5 years, this is not true.

Good luck!

Hannah Fliegel, FICO Pro
0 votes
Help10, Home Seller, 34655
Tue Aug 3, 2010
I'm am trying to short sale the property, but the bank is demanding the price that is way higher than I can realistically get, the bank won't budge. I don't understand why the bank is not willing to negotiate, it seems they would rather lead to a foreclosure which I'm trying to avoid. I'm lost!!!
0 votes
Annageorgia…, Agent, New Port Richey, FL
Tue Aug 3, 2010
If the bank forecloses, your credit scores will "tank"...and you probably won't be able to buy a house for 5-7 years; and you will probably be responsible for the deficiency judgement. If you get someone to buy it as a short sale, your credit scores won't be so severely damaged and you can probably buy again in 12-24 months and be sure that you tell the bank you will NOT be responsible for the deficiency as you negotiate with them. If you can't find a buyer, give the bank the house (deed in lieu of foreclosure) and your credit won't be as damaged as in a foreclosure.
0 votes
Dianne Scott, Agent, Eustis, FL
Tue Aug 3, 2010
Hi Help10,

It all depends upon the individual circumstances. Consultation with an attorney and an accounting professional would be a good idea. It is very likely that if a deficiency judgment is obtained, they will go after any personal property owned by the borrowers. I have heard that these debts will probably be bundled and sold to third parties. Once we go into a real recovery, and individuals begin to acquire personal and real property again, they will begin seizing and/or placing liens on that property to collect those debts. They are similar to your run of the mill collection agencies, and they will probably negotiate some pennies on the dollar settlements. A seller should always hire an attorney in a foreclosure, short sale or deed-in-lieu situation to make sure they can negotiate a full release so that they are not surprised by something like that in the future.

Web Reference:  http://www.DianneScott.com
0 votes
Wendy Smith, Agent, Crystal Beach, FL
Tue Aug 3, 2010
it is seldom necessary to go to all the way to foreclosure sale in Florida (primary residence).

there are many options -

http://www.wendysmithshortsales.com - this will give you info on short sales
or feel free to call me - most likely I can help you or at the very least, point you in the right direction.
0 votes
Antonio Vega…, Agent, Saint Cloud, FL
Tue Aug 3, 2010

I forgot to add, a Deed in Lieu... could actually have further consequences like you mentioned in the question. Again talk to an attorney, about the benefits of Foreclosure over Deed in Lieu.

You can find an attorney to give you a free consultation by calling your local Realtor Association and asking for a list of Affiliate attorneys.

Tony Vega
Charles Rutenberg Realty
0 votes
Antonio Vega…, Agent, Saint Cloud, FL
Tue Aug 3, 2010

Do to the Debt Forgiveness Act, which was extended by president Obama you will "likely" get a 1099 form which forgives your tax consequences (for which you would be responsible if it was an investment home instead).

However all situations are slightly different, so you must consult your accountant and or attorney to get specific details regarding your case. As Realtors we cannot give financial or legal advise.

Tony Vega
Charles Rutenberg Realty
0 votes
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