In Florida, homeowners are facing collections from foreclosures that happened years ago.
A deadline change in Florida’s state law has triggered a mass filing of “deficiency judgment” claims against borrowers who had defaulted on their home loans. Other states throughout the U.S. may follow Florida’s lead going after homeowners who defaulted on their home loans. Colorado currently allows six years to file for a deficiency judgment.
The change in the Florida law reduced the timeline that banks and mortgage companies have to file for a deficiency judgment from five years to one year after the foreclosure is final (when the home is sold at auction). The deficiency is the difference between the amount owed on a loan, and the amount received or collected. For example, if a home is worth $150,000, sold for $100,000, the deficiency is $50,000.
Up until this state law change, homeowners who lost their homes through foreclosure were fairly safe from having collection agencies come after them. They thought the worst was over when they lost their homes.
When the housing market crashed, many homeowners walked away from their homes, most of which were underwater (owe more on the house, than the house was worth). They felt the investment (home) was just not worth paying on month after month. Others had to default on their loans when they lost their jobs or when ARMs became due and mortgage payments tripled.
A Texas-based company began collection schemes on behalf of federal mortgage backer Fannie Mae to try to recoup some of their losses. They filed hundreds of deficiency judgments against post-foreclosure homeowners who had moved out of state. Those homeowners had 20 days to respond. By the time the post office forwarded the mail (IF there was a forwarding address), the 20 days was up and the deficiency judgment was given by default of not responding. The deficiency judgment can then be sent to a collection attorney wherever and whatever state the borrower is living.
Florida foreclosure defense attorneys are claiming these collections violate the Fair Debt Collection Practices Act. A class action lawsuit is being sought in the Middle District of Florida on behalf of a Massachusetts resident who lost his house in 2009 to foreclosure.
So far, there have been almost 10,000 deficiency judgment claims filed in Florida and there may be another 5,000 that have yet to be filed.
Real estate attorneys are questioning whether deficiency judgments are being filed by the appropriate party, and if required notice is being given. The general thought is the deficiency judgment should be sought through reopening the old foreclosure case, something Dyck O’Neal wouldn’t want to do, fearing the original foreclosure could be challenged.
Colorado foreclosure defense attorney Keith Gantenbein is a premier foreclosure attorney, located in Denver and serving all of Colorado. If you have a post-foreclosure deficiency issue, facing foreclosure, or need foreclosure assistance in Colorado, contact The Gantenbein Law Firm immediately for a one-hour consultation: 303-618-2122.
Keith Gantenbein, of The Gantenbein Law Firm, Colorado foreclosure defense practice includes Colorado foreclosure help, foreclosure help in Denver, foreclosure prevention, Rule 120 Foreclosure Hearings, evictions, judicial foreclosure, post-foreclosure litigation, HOA foreclosures, foreclosure assistance, cash for keys, foreclosure settlement, loan modifications, short sale assistance, , foreclosure assistance, foreclosure set-aside, and all other foreclosure defense legal assistance. His real estate practice includes real estate closings, title issues, quiet title, real estate contracts, lien issues, bankruptcies, mortgage negotiations, lender liability, real estate litigation, evictions, contracts and landlord/tenant. Keith Gantenbein also practices HOA defense– including helping homeowners with their HOA foreclosures, HOA lawsuits , HOA liens, and defense against wrongful covenant enforcement.
Gantenbein Law Firm practice includes Colorado Foreclosure Defense, Colorado Real Estate Law, Colorado and Federal Tax Law, Colorado Business Law, Credit Dispute and Credit Repair, and Colorado Wills & Trusts. For more information, visit our website: www.gantenbeinlaw.com
Gantenbein Law Firm also specializes in Federal and Colorado Tax Law. If you are facing an IRS tax audit or IRS tax appeal, facing tax litigation, need tax debt relief, in need of tax planning or filing tax returns, have received a Notice of Tax Deficiency or Notice of Wage Garnishment, or need help with an IRS installment plan or IRS offer in compromise, contact our Denver tax attorney immediately at 303-618-2122. Or, visit our Denver tax attorney website