Many people who’ve had their homes foreclosed on wrongly believe that this is the end of their financial troubles related to their home, when in fact the opposite is true, as the bank may still find a mortgage foreclosure deficiency lawsuit against you if the fair market value of the home when it is sold is less than what you owe on the mortgage. This mortgage foreclosure deficiency lawsuit basically means that the bank is suing you in order to recover the remaining balance on your mortgage if the value of the home didn’t cover it all, which can spell disaster for those whose home was underwater (when you owe more on the home than it is worth) at the time of foreclosure.
However, there is some good news for those who’ve recently gone through a foreclosure, as last year Florida passed a new law governing mortgage foreclosure deficiency lawsuits, lowering the amount of time banks have to file from 5 years to 1. In the past, many people who be forced to spend five nervous years waiting to see if the bank would try to recoup the remaining balance of the mortgage and were often forced to file for bankruptcy if the bank decided to file a mortgage foreclosure deficiency suit.
Luckily though, the new law now means that you only have to wait a year to learn your fate, which can be a huge relief and will surely help many from being forced into bankruptcy years after their home was foreclosed upon.
This new law actually went into effect last year on July 1st, but at that point it only applied to any foreclosure proceedings that were filed after that date, meaning that even if your home was foreclosed on more than three years ago, you may still be subject to a lawsuit at some point. However, if your foreclosure lawsuit was filed before any time in the four years leading prior to the new law going into effect, then the bank has a deadline of July 1, 2014 to file the lawsuit.
What this means is that no matter when your home was foreclosed on, you will soon know whether or not your mortgage lender will be suing you for the remaining balance of your mortgage. This law is overall great news for anyone who’s suffered the embarrassment of a foreclosure, as by decreasing the statute of limitations for filing a mortgage foreclosure deficiency lawsuit from five to one year, Florida has taken a huge step towards protecting homeowners and hopefully working to lessen the serious problem foreclosures have been causing in the state.
Still, if you do receive news that the bank is pursuing this type of lawsuit against you, you’ll want to discuss all of your possible options including filing for bankruptcy with a professional bankruptcy lawyer. At The Law Office of Kelley and Fulton, P.L., we have over 25 years of experience helping people just like you find the right solutions to their financial problems.