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Daniel M. Copeland Motto

What is a Foreclosure Deficiency Judgment?


A deficiency judgment refers to a mortgage lender’s judgment against the borrower for the difference between the outstanding balance of the mortgage note, plus costs and attorney’s fees, and the value of the property foreclosed.  For purposes of calculating the amount of deficiency liability, the foreclosed property “value” is the fair market value on the date of the foreclosure sale auction. For this purpose, the house value does not depend upon when and for how much a bank ultimately sells the foreclosed property. In Florida, a mortgage foreclosure does not automatically result in a deficiency judgment.

To obtain a deficiency judgment against the borrower after the foreclosure sale, the mortgage lender has to file a motion for deficiency in which the lender will allege the property’s market value on the sale date and the amount of the deficiency.  The homeowner can defend the motion and can contest the lender’s valuation.  If the homeowner files a defense, the court must hold a separate hearing on the lender’s request for deficiency. At the hearing, the mortgage lender has to show the court evidence that the property’s value on the sale date was less than the note balance.  Evidence of value requires the lender to produce a valuation expert witness.  If the court finds that the foreclosed property was worth more than the note balance on the sale date, the court will not give the mortgage lender a deficiency judgment against the borrower.  A 2013 Florida statute gives the mortgage lender one year after the foreclosure sale to file a motion for deficiency. During the real estate boom in the prior decade, deficiency judgments were uncommon because increasing real estate values brought home values above the note balance of defaulting mortgages.



Daniel M. Copeland, Attorney at Law, P.A.

9310 Old Kings Road, South

Suite 1501

Jacksonville, Florida 32257

Office: 904-482-0616

Facsimile: (904) 482-0618


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