Mortgage Foreclosure Deficiency - Dycke O'Neal Has Come to Town

Dycke O'Neal, Inc. - - Recent Developments in the Collection of Deficiency Judgments after Mortgage Foreclosure 

For the past 30 years in Miami-Dade County, Florida, large mortgage companies and banks virtually never pursued a "deficiency" judgment after a mortgage foreclosure on a first mortgage.   The best advice at the time was not to be concerned about a deficiency judgment.

Recently though, things have apparently changed.  Many people have been contacted or sued by Dycke O'Neal, Inc. which is a large "debt vulture" with its main office in Texas. This company has purchased foreclosure judgements from lenders who have already conducted their foreclosure sales, but retained the right to sue for a deficiency after the foreclosure sale. many people are being sued for amounts in the range of $100,000 to $200,000.

Deficiency Judgment

A typical residential mortgage foreclosure action usually only initially seeks a judgment setting a foreclosure sale of the real estate. It does not seek a "money judgment" upon the mortgage promissory note. But although most foreclosure judgments only determine the balance due and set a foreclosure sale, the judgment retains the jurisdiction to issue a deficiency judgment.

Limitation on Amount of Deficiency

The new "Florida Fair Foreclosure Act" effective on June 7, 2013 provides a limitation on the amount to be allowed as a deficiency regarding foreclosures of owner-occupied residential real estate. The amount to be awarded may not exceed the difference between the foreclosure judgment amount (or in the case of a short sale, the outstanding debt) and the fair market value of the property on the date of the foreclosure sale.

One-Year Statue of Limitations to Seek Deficiency Judgment

The new act also provides in Florida Section 95.11(5)(h) that for actions file on and after July 1, 2013,  a claim of deficiency, subsequent to the foreclosure of one-to-four family residential properties, must be filed within one year from the day after (1) the certificate of title is issued or (2) the mortgage lender accept a deed-in-lieu of foreclosure.  For other actions, a deficiency claim must be brought by the earlier of (1) five years after such action accrued or (2) by July 1, 2014.

(305) 891-4055 - Jordan E. Bublick is a Miami Bankruptcy Lawyer with over 25 years of experience in filing Chapter 13 and Chapter 7 Bankrkuptcy Cases and Mortgage Modifications