The foreclosure crisis of 2008-2012, seems to be the gift that keeps giving. For years, Floridians have heard about the detrimental impacts of foreclosure “rocket dockets” and “robo-signers”. The “robo-signer” term describes those individuals who were hired by banks and foreclosure mills alike to sign and attest to foreclosure documents that were never actually reviewed. The end result was millions of improper foreclosures and headaches for borrowers. The “robo-signer” anomaly literally made a mockery of the American judicial system while legislators sat back and did nothing. Finally, the Department of Justice began pursuing these banks and law firms, which resulted in numerous fines and payouts to the tune of billions of dollars. After the settlements, we thought we had seen the end of the “robo-signing” effects. However, we were wrong….
Now, the “robo-signing” effects are coming full circle; this time in the form of deficiency judgments. In Florida, banks are provided a statutory right to pursue individual borrowers for any amounts that remain due and owing on the promissory note, even after the sale of the property through foreclosure auctions or REO sales. For years, there was little discussion pertaining to the deficiency judgment, as the banks were bogged down by the shear number of foreclosures facing them. However, after Florida passed the Speedy Foreclosure Law in 2013, the statute of limitations to pursue a deficiency was reduced from 5 years to 1 year. Now, banks are scrambling to file deficiency suits in order to not blow statutory deadlines. In turn, millions of former homeowners are now facing additional debts from past foreclosures.
This claw back comes at a time when many foreclosed owners have just begun to get back on their feet after financial melt downs in the late 2000’s. The lenders see the ability to make a money grab where individuals have finally begun to save again. What makes matters worse is that many of these claims for deficiency come from fraudulent foreclosures which were made possible by “robo signers.” Quite simply, lenders now seek to recover money from former borrowers through foreclosure judgments that were fraudulently obtained. This is bad news for individuals who thought they may have finally wiped their hands of a former foreclosure.
There is some good news amongst the bad, however. If the lender is seeking to recover a deficiency from a fraudulent foreclosure judgment, then there are strong defenses that can be raised as part of the deficiency lawsuit. If the judgment giving rise to the deficiency right can be called into question, then it becomes more difficult for the lender to prevail in the deficiency suit. If you or anyone you know is being pursued for a deficiency judgment by Dyck O’neal or other judgment creditors, call the experienced attorneys at DeWitt Law Firm to help defend you.