Many residents in South Florida are confronting a new second wave of foreclosures and their consequences. Banks are attempting to secure unpaid mortgage debts from foreclosed homes that were lost years ago. Beginning June 1st Dyck O’neal filed nearly 110 alleged deficiency judgments; it is a Texas-based collection company, in Palm Beach County, 200 in Miami-Dade County, and 300 in Broward County. There is a belief that because the deadline changed from 5 years, in order for banks to file a deficiency judgment, to one year this has triggered the hasty lawsuits.
Deficiency judgments allow the banks or companies to go after the dividend of what the home was auctioned for. This is valid for the banks or companies that bought the mortgage debts. And, the remaining balance that the homeowner is still accountable for. Furthermore, the Palm Beach Post found many occurrences where the bank is coming after the previous homeowners for more the $100,000; means of liens, claiming rights over investment properties and garnishing your wages can seize a debt.
Furthermore, deficiency judgments are not a new ruling and the possible risk has always hovered over our heads; however, banks saw it as pointless to pursue homeowners with little money. And, the amount of foreclosure to exercise this ruling overwhelmed them too much. But since the economy has improved lately, lenders have sought this as the chance to collect the debt owed.
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