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Can a collection company obtain a deficiency judgment for a 2nd mortgage on a foreclosed home?

Orlando, FL |

Hi, the house (in FL) was foreclosed and auctioned off about two years ago (default foreclosure, no deficiency judgment then but no waiver either). Both 1st and 2nd mortgages were with one lender, and the house sold for even less than the first mortgage. Now a collection agency called and sent a letter trying to collect the debt from the second mortgage. Can they obtain a judgment and any possible actions to avoid that? Should I request a debt validation from the collection company or just ignore it (I am afraid a validation request might lead them to start a lawsuit leading to a deficiency judgment)? Thank you in advance for your great help!

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Attorney answers 3


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.


Many companies will sell off debt rather than try to collect it themselves. If the debt was for your primary residence, you can send a debt dispute to any third party trying to collect and demand that they prove the amount and the right to collect.

Once the lender foreclosed and sold the property, anyone who had a lien (mortgage) on the property and did not get paid in full can sue.


Yes. They definitely can do this. I try all the time to warn people about this very dangerous situation. For some reason, many people mistakenly believe they can "just walk away". While there may be some states where this is possible, Florida is NOT one of them. Even in the states where it may be possible, anti-deficiency legislation generally does not extend to second mortgages or to houses that were not the borrowers' primary residence. Please see my Legal Guide, Deficiency Judgments after Foreclosures in Florida:

Many people seem to think that, although they have substantial balances due on first and/or second mortgage companies, the owners of those debts will just forget about them. This is completely incorrect. In Florida, they have FIVE YEARS post-foreclosure to even begin the deficiency judgment process, so they are in no rush. The fact that someone has not heard something prior does not mean that they are in the clear - far from it !

Yes you should request a debt validation from the collection company. It will not do any harm and may provide you with useful information or, more likely, they will violate their obligations which may prove defensively useful. If you are being pursued, odds are that this is a debt buyer, not a collection agent for the prior owner of the loan. Their typical model is to send the notice, to try a few attempts to collect, and then to sue.

Assuming you do get sued, you need an attorney, one who is knowledgable in how to defend against this kind of case. They are difficult to defend against - the best time to push back was during the foreclosure, which you did not do.

Another possible option is Bankruptcy.

You should consult a qualified attorney who is knowledgable in consumer litigation and bankruptcy, to get a clear picture of whether or not you are a bankruptcy candidate (if you are, bankruptcy may be the fastest and least expensive solution) or if not, what you are looking at by way of defense.