Deficiency Judgments Explained
A deficiency is the gap between what you owed and what the home brought in at sale. Florida allows lenders to ask the court for a judgment for that gap.
How it works
The lender may request a deficiency within the foreclosure case or in a separate lawsuit. Florida law generally limits a separate deficiency action to one year after the certificate of title is issued.
Courts may consider the fair market value of the home, not just the auction price.
Reducing the risk
- Sell before auction if you have equity.
- Negotiate a written deficiency waiver in any short sale or deed in lieu.
- Talk to an attorney about defenses and to a tax professional about forgiven debt.
Keep exploring
Additional Paths to Review
Other possibilities to discuss with your servicer, housing counselor, or attorney.
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