It all starts with a Florida Mortgage Loan. Please make sure you make ALL of your mortgage payments on-time. If you can not make your payments on-time, then contact your mortgage lender and ask for a mortgage workout. That is the subject of a future article. For now, I will discuss what happens when a borrower does not make the mortgage payments on-time.
The lender will bring a lawsuit in a judicial foreclosure state such as the state of florida. The borrower must respond to the lawsuit by answering the complaint. If the homeowner does not answer the complaint, the foreclosing lender wins a default judgment. Default judgment is a separate issue than a deficiency judgment. The deficiency judgment in florida is possible through a judicial foreclosure in the florida courts.
The debt collectors are waiting for deficiency judgments so that they can collect through garnishing wages and levy of bank accounts. Imagine going to the ATM and not being able to withdraw funds because of the deficiecny judgment in florida that a debt collector got a hold of.
Look at florida deficiency judgments as a means for the florida foreclosure to enforce their rights under a recourse loan. When the loan payments can not be made and florida forecosure ensues, the deficiency judgment is not far behind.
This not a solution that anyone is looking for. You may avoid foreclosure and avaoid the deficiency judgment whenever possible. This is what everyone would like to see, except for the debt collection industry. They of course want florida deficiency judgments and the pusuit of florida homeowners through default judgments. No one likes debt collectors and no one (else) likes deficiency judgments in florida.