Skip to comments.Deficiency judgments let creditors haunt borrowers for up to 20 years
Posted on 03/28/2011 7:16:39 AM PDT by dawn53
Think of it as Act 2 of Florida's foreclosure crisis.
In the first act, borrowers lose their homes.
In the next, lenders come after them for the debt still owed.
Unlike a foreclosure, which homeowners dread but expect once they stop making payments, deficiency actions can sneak up on people who thought their problems were behind them when they handed over the house keys.
"People have no idea of all the trouble that's coming," said Margery Golant, a lawyer in Broward County who is handling a growing number of deficiency defense cases.
(Excerpt) Read more at tampabay.com ...
“Most of my clients do not wish to seek out an attorneys advice.”
Why get an attorney when you can blame the agent.
I don’t see that happening at least in a legal sense. Sure agents are bad mouthed all the time and some deserve it but I don’t see any legal actions dominating the scene. Which actually is kind of surpising given the nature of field.
Documentation is my best friend. That’s my philosphy.
I had my real estate license for 2 years. Saw the crash coming and did not like residential real estate. The sheer stupidity of some people was too much for me.
I would definitely use a lawyer to protect my interests. Using one to screw another party is a different story. I know there are some crooked banks out there, just got done dealing with one, who will screw borrowers at every opportunity, but, to me, that doesn’t excuse borrowers trying to screw them too.
“I know there are some crooked banks out there, just got done dealing with one, who will screw borrowers at every opportunity, but, to me, that doesnt excuse borrowers trying to screw them too.”
You cannot trust banks in these kinds of dealings, you have to have a lawyer and you have to fight for your legal rights.
I sold a house and went through all kinds of problems because the bank just would not respond. I’d fax them paperwork and they’d lose it. I’d refax it and they’d acknowledge having it, and then lose it.
Every time they lose someones paperwork its a violation of privacy laws. Nobody is enforcing those laws and the banks sure do not care.
At some point, sellers still unrealistic expectations will give way and there will be a big fall, perhaps even an overreaction (as is typical when bubbles pop). Remember, mortgage rates for those who still qualify remain artificially low, and as inflation heats up, as it now is, borrowing costs will increases, reducing buyers' purchasing power, and hence, prices.
Some observers think prices could drop to 1987 levels (although, 1987 was itself a bit of a bubble year.....).
I guessing that most people looking to buy in the long term would be better off renting in the short run and saving money to buy when prices drop another 15-20%. Few people will perfectly time the bottom, but it's not really time to buy yet.
You got it 100% backwards
The banks were FORCED to make these bad loans.
Barney Frank and Chris Dodd made the rules that said that banks had to make loans to lower income people. But the banks were not doing it- they refused.
Then Andrew Cuomo came along and sued one of them for ‘discrimination’, and won what was the single biggest judgement in history (at the time) $$Billions.
Then the banks saw the light- They either made the loans and lose some money, or get sued and lose billions. And the government was going to guarantee those loans anyway, so.... the made them.
This is also why the banks got bailed out. They would have spilled their guts about this otherwise.
You should NOT be giving legal adive!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
This is remarkably bad advice. You clearly are not a lawyer and do not have a clue.
In California mortgages are by law secured only by the property. Banks have no ability to come after people for other assets once they foreclose.
Do you feel you are losing money when the pawn shop has to sell the saxophone? If not, why do you feel you are losing money when a bank has to sell a piece of property it's client has defaulted on?
The bank my *claim* they are out money if the loan was for $200,000 and they can only sell the house for $150,000. But, on the other hand they made interest payments on it for however long it was in place.
Banks are given a monopoly by the state, which they use to make themseves very rich. In excange for this they can be required to take some risks as well.
And yes, sellers for the most part are unrealistic and unreasonable. That's why I haven't listed anything for quite awhile. They get pissed when they're told the truth and that is hard to take. Some still have not realized just what is happening.
Anyway, if someone is set financially they can step in and get great bargains right now, but buyers are going to become scarce because there are more and more people losing their livelihoods. That's why the foreclosure rate is so high in the area I'm in. The Chrysler plant closed down and it was the largest employer in the area. Whatever else is coming, it's not good.
Anyway, if someone is set financially they can step in and get great bargains right now, but buyers are going to become scarce because there are more and more people losing their livelihoods. That's why the foreclosure rate is so high in the area I'm in. The Chrysler plant closed down and it was the largest employer in the area. Whatever else is coming, it's not good.<.i>
If some one has the cash, it's no bargain to buy now if prices will decline further - especially to buy for investment. You would still see further declines of another 20% (from 2008 prices) and, while you could borrow at low rates, you'll lose substantial equity on the way down while you're still paying taxes and financing costs. The smarter money will wait another 2-3 years, earning something on her money, and let someone else buy on the way down, losing equity, and paying the taxes and carrying costs. So, when that buyer falls into trouble and has to sell at a loss, then the savvy investor will swoop in....
You’re right of course. I should have put in the added comment that current purchases are going for up to 30% less than LP and many of the List Prices were already below market value. Alot of it is dependent on the area as well. For example, there are homes going for 15K-30K. Yes alot need work but over all still a good investment even if for only the rental market. Some with money are looking for places to ‘park’ it for now; thinking they can ride out the storm.
Also, first time home buyers are still surfacing but, need near perfect credit. I listed a foreclosure, 1350 sq feet, 1 acre. House in good condition. Went for 45K (u/c) and it is a first time home buyer. His payments will be less than renting.
So it’s dependent on each individual’s circumstance. I’m not sure anyone knows what the true value is of any one property. What is the value based on now? Original SP, which was most likely based on an inflated appraisal? The MLS trends? LP and then the SP of that property? Or is it volume based which is also skewed. I don’t trust the MLS any further than I could toss it because there are agents that deliberately inflate their sp in this area. There’s no way to verify the SP around here, not without tracking down the closing office because it’s not required to disclose the amount to the county. (yet)
In other words, how can anything be predicted when the original figures were so skewed? Another thing to consider is the 1st and 2nd mortgages. You know, the lines of credit based on equity. If you were to investigate the loans/homes underwater, 9 times out of 10, they have a 2nd.
One thing we can agree on...it’s a mess and it is going to get messier.
The thing is that the bank took that risk when they accepted the house as collateral.
For example, say you think silver is a good risk at $37 bucks and you buy a bunch and next week it goes to $16, that was a risk you took with your eyes wide open.
Those banks loaned money on the value of the houses and it wasn’t the homeowner who made the value fall. It is the risk of doing business and why should the banks be sheltered? They made bad business decisions.
By current prices (from which I expect at least a 20% additional decline -from 2008 levels), I mean actual selling prices. Truly, the only price that matters is what a willing buyer will pay and what a seller (including a bank that wants to unload REO) will take for it.
Listing prices, as you correctly note, usually reflect little more than sellers' wishful thinking abetted by agents who don't want to lose the listing to someone who will play along.
I think are are in agreement that the trip to hell in a handbasket continues apace!
Ya mean the same Frank and Dodd who have deep connections to banks. They didn’t force the banks to do anything the banksn didn’t want them too.
Thats why the banks spent so much money and had all the right people on their Boards.
If there is a deficiency after resale??? Dang!!!!
Banks were making money as fast as they could and were lobbying for lax standards, same as the builders, the realtors and the republicans and democrats.
oh my gosh, we agree on something