Deficiency Judgment Defense

If there’s still money owed to the mortgagee after the foreclosure sale, then there’s a chance of a deficiency judgment.  There are two ways a lender can get a deficiency judgment against a borrower. The lender can either ask the court to rule in its favor during the foreclosure process, or it can file a separate lawsuit for deficiency judgment.

To determine if there’s still money owed, the price paid at the foreclosure sale is crucial.

The procedures for seeking a deficiency judgment can also vary depending on whether it’s through foreclosure or a separate lawsuit. For instance, the person who owns the property must be informed about a demand for a deficiency judgment through the pleadings and hearings in the foreclosure case. If the lender is trying to get a deficiency judgment in a separate lawsuit or through foreclosure, it will still need to follow all the rules and procedures set by the Rules of Civil Procedure. This includes who gets served, where the documents are sent, and other legal stuff. Only the person who was personally served and owes the money can be sued for a deficiency judgment. 

At the hearing, the person who owns the property can try to stop the judgment by bringing up defenses and showing evidence. If they win, the judgment can’t be issued. The amount of the deficiency judgment is based on how much the property was worth when it was sold at a judicial sale. If the property’s worth is more than the total amount of the mortgage, there’s no need for a deficiency judgment. But if the property’s worth is less than the total amount of the mortgage, the mortgagee can get a deficiency judgment for the difference. 

After looking at all the evidence and considering all the legal principles, the court will decide if the mortgagee is allowed to get a deficiency judgment against the person who owns the property. 

Have you been sued for a deficiency judgement? 

The decision to award a deficiency judgment lies solely with the equity court. Appellate courts won’t overturn the trial court’s decision unless there’s clear abuse of discretion.  Its therefore advisable to seek out competent legal counsel as soon as possible.  Contact Orlando area foreclosure defense lawyer Andrew J. Pascale today at 877-667-1211 to discuss your case.  This blog does not constitute legal advice and is for illustrative purposes only.