Short sale took place 3/10 (second home ). Approval did not have no deficiency clause. Letter never mentioned deficiency, in fact, stated that difference may be considered forgivens of debt & would be reported to IRS. Per attorneys advice, handwrote on approval letter with my signature "Signing this approval with intention of no pursuit of deficency in the future". Bank report to all the bureas the above language with 0 balance & closed. Never mentioning charge-off or settlement. I'm understanding the LEGALLY PAID IN FULL FOR LESS THAN FULL BALANCE means the lender has accepted less than what is owed and considers it Paid in Full for the entire loan. 3 months later Im getting calls from collection agency assigned by Bank. What do I do?
Let's separate their "legal rights" from what happens in the real world here, because if you do that life gets much less scary.
Deficiency judgments are available in mortgage foreclosures brought under a separate section of Florida Statutes, but that procedure is much slower than an "in rem" foreclosure under the usually-used (99%+) section. If the bank doesn't use the slow method, they're left with the option of suing on the note anytime in the next 5 years, but they have to file a new case to do it.
Jonathan Alper, a Florida Asset Protection attorney, reported one of his lawyer buddies had been told by a judge about the foreclosure judgments granted in Lake County in the '08-'09 time frame. Out of 11,000 or so, zero deficiencies sought or granted.
So why are you getting the calls? They're fishing, plain and simple. The remaining debt is completely unsecured, which is a kissing cousin to uncollectable in these parts.
In addition, if and when you get a form 1099-c you should know that although there is not Florida case law about it yet, in Connecticut at least it counts as a "signed writing" under the Uniform Commercial Code discharging the debt and making it unenforceable. Nonetheless, there are a handful of companies like Franklin Credit Management, Ocwen, and Dyck O'Neal that buy this paper, and collectors like Real Time Resolutions make the calls.
Let me know if you need any help, I'm nearby.
The above general advise is all good to consider and contemplate. If you did sign that this was an accord and satisfaction, put the bank on notice, and relied on their representation to close the home, you have an argument (or at the least an affiramtive defense) to any subsequent collection. You also could have the basis for an unlawful debt collection lawsuit against the mortgage company, provided the debt was originally a consumer debt. Florida State 559.72 (9) prohibits the assertion of a right that does not exist in collecting a consumer debt. If you have documents that the bank's right to the deficiency was waived.....or a 1099c (as another colleague pointed out) was issued, each fact could be the basis for an unlawful debt collection lawsuit. Gather your documents and details and contact a consumer law attorney. Most consumer law / creditor harassment attorneys will take this on a contingency basis where you do not pay them anything unless they prevail for you. Good luck! www.ConsumerRightsGroup.com www.FloridaBKLawyer.com
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Reporting any information to a credit reporting bureau does not change the legal rights of a party.
Here are some Quick Facts about Foreclosure in Florida:
Judicial Foreclosure Available: Yes
Non-Judicial Foreclosure Available: No
Primary Security Instruments: Mortgage
Timeline: Typically 180 days
Right of Redemption: Yes
Deficiency Judgments Allowed: Yes
In Florida, all mortgages are foreclosed in equity. In a mortgage foreclosure action, the court severs, for separate trial, all counterclaims against the foreclosing lender. The foreclosure claim shall, if tried, be tried to the court without a jury.
The court order of foreclosure will specify how the foreclosure must take place, and the foreclosure must take place on those terms. Whenever a legal advertisement, publication, or notice relating to a foreclosure proceeding is required to be placed in a newspaper, it is the responsibility of the lender or their representative to place such advertisement, publication, or notice.
Equitable Right of Redemption ends at the foreclosure sale (or at another time specified by the courts, but this rarely happens). There is a period of time after the sale that "the court reviews the sale to ensure a fair price has been paid." Basically, this period of time allows parties to object to the sale on the basis that proper procedures were not followed or collusion existed between the bidders, for example. This period is usually 10 days, after which the Certificate of Sale is filed and title passes, if the sale is confirmed. If the sale is not confirmed, another sale is ordered. (Reference F.S. Chapter 702)
The lender may sue to obtain a deficiency judgment in Florida.
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Disclaimer: This answer does not constitute legal advice. I am admitted in the States of New York, New Jersey and Massachusetts only and make no attempt to opine on matters of law that are not relevant to those three States.
Please stop relying on your credit report for legal advice. A credit report is not a legal document & isn't evidence in a court case.
If you are being sued by a creditor to collect for a deficiency, you need to get legal representation right away. If you are not being sued, you may be able to wait it out.
If you would like to try to settle with the creditor, be sure that the person you deal with has authority to deal with you. And remember, COLLECTORS LIE!
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