What is a deficiency judgment?

A deficiency judgment is a court order that holds a borrower responsible for the difference between the amount received from the foreclosure sale and the amount still owed on the home loan in Florida. For example, if a borrower owed $200,000 on the home loan and the foreclosure sale only brought in $150,000, the court order would require the borrower to pay the $50,000 difference. This deficiency judgment will usually include interest and any court costs. Deficiency judgments can be sought by lenders and other creditors and can lead to the borrower’s wages being garnished, bank accounts being levied, and other assets being seized. A deficiency judgment can remain in effect for up to twenty years and can even be transferred to another lender or creditor. In Florida, lenders cannot seek deficiency judgments in cases of certain types of mortgages, such as those insured by the Federal Housing Administration or those that qualify for Veterans Affairs loans. Additionally, deficiency judgments can be avoided by filing for bankruptcy before the foreclosure sale.

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What is a deficiency judgment?

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