Beware of Your Lender

Lenders will be filing a tidal wave of lawsuits against homeowners in the next few years as a way to recoup losses when homes sales or foreclosures auctions don’t result in enough money to pay the mortgages in full. It will be a dramatic problem because  borrowers will not know it’s coming. In Florida, banks have five years from the date of the sale to file a deficiency judgment and up to 20 years to collect. Lenders can garnish wages or make claims on borrowers assets.

Before the mortgage melt down of the last few years lenders rarely brought a homeowner to court, it wasn’t worth it. Homeowners only defaulted if they really had to, that has changed. Many who have defaulted have assets that the bank can go after.  Banks will go after angry homeowners who have ruined their own property and left. Those who are underwater or upside down on their mortgage but can still pay the payments and second lien holders. If you are upside down and have tried modifying your loan only to be told no by the bank, think twice about walking away. You are the type of borrower they will be coming after.

Banks have begun selling off their loan to third party companies. Major banks are setting up separate companies to go after loans they think they can collect on and selling the balance to other companies to collect on.  I had a client call me this week and she was one of the first short sales I did in Meadow Pte. They are coming after her for her second loan 18 months after the short sale closed. She had lost her job, so don’t think they won’t come after you.