If you lost your home to foreclosure and your lender sold your home, you may think that you are finally free from your monthly mortgage payments – but that isn’t always the case. In fact, your lender may be able to legally make you pay the rest of your mortgage through a deficiency judgment against you, even AFTER your home is sold.
So, what exactly is a deficiency judgment and how can you set yourself up for success while going through the foreclosure process? Denbeaux & Denbeaux is a foreclosure defense law firm that has been helping New Jersey homeowners for over 10 years and we know what it takes to avoid a deficiency judgment and finally get out of foreclosure for good.
If you have already received a deficiency judgment and want a fast track to learn what options you have in your situation, be sure to schedule a free consultation with our foreclosure defense attorneys.
What Is a Deficiency Judgment in Foreclosure?
In order to understand what a deficiency judgment is, you should first understand the foreclosure process and what happens in order for a judge to pass a deficiency judgment against you.
Once you stop paying your monthly mortgage payments, your lender will eventually send you a Notice of Intent (NOI) to foreclose. The NOI informs you that you are being foreclosed on by your lender and provides you with some information on what you need to do next. Depending on the situation you may be able to stop a foreclosure on your home and avoid this whole process, but we understand that this won’t be an option for everyone.
If you lose your home in foreclosure, your lender will likely attempt to sell your home to recoup the money that you still owe on your mortgage loan. Sometimes, the lender won’t be able to sell the house for a price that equals the full amount you still owe – the difference between your loan and what your house sold for is called a deficiency.
A deficiency judgment is an order from the court for you to pay the difference between what your home sold for in foreclosure and what you owed on the mortgage.
You won’t automatically get a deficiency judgment against you, in fact your lender has to file a lawsuit in order to obtain one after foreclosure is over. Some lenders won’t even act on a deficiency judgment and might leave you alone once your house is sold. This could happen if the amount you owe is too little or if your lender simply decides it isn’t worth the time to go through the process. However, if your lender does file a lawsuit and if the motion gets approved then you will be legally obligated to make up the deficiency.
Can I Fight Against a Deficiency Judgment After Foreclosure?
Unfortunately, homeowners often think they are free from foreclosure once their home is sold and are completely blindsided once their lender files a deficiency judgment. Not only have you lost your home to foreclosure, you may also now have to keep paying the remaining portion of your mortgage.
If you know that your home has lost value since you bought it and you’re facing foreclosure, working with a foreclosure defense attorney from the beginning can help you avoid losing what equity you may have in the home as well as potentially save you from paying for a house you no longer have.
If you’ve already been foreclosed on and are facing a deficiency judgment, you may still be able to take action with the help of a foreclosure defense attorney. Every situation is unique with deficiency judgments so getting advice from an experienced foreclosure lawyer can help you make better decisions on what steps to take.
While you can fight back against the deficiency, you can’t just ignore it completely. If you do ignore the judgment then your lender could use the deficiency judgment to place a liens on your other assets, garnish your wages, or even freeze your bank accounts.
Deficiency judgments can continue to ruin your financial future well after foreclosure is over. It doesn’t need to come to that – speak with a foreclosure defense lawyer to see what options you may have to stop the deficiency judgment before it’s too late.
Deficiency Judgment Statute of Limitations In New Jersey
In order to file a deficiency judgment against you, your lender must file within three months of the date that your house was sold. Once again, not all lenders will pursue a deficiency judgment but it depends on the circumstances and how much money you still owe.
Even if your lender files a lawsuit for a deficiency judgment against you, you can still dispute the amount that you owe. If you believe that your house was sold for less than what the market value is then you can make a case in court.
To make your case in court you’ll need to have evidence that supports your appeal. The court will use your evidence to assess the property’s value and determine the amount of the foreclosure deficiency that you actually owe.
Homeowners who dispute the deficiency amount will lose the right of redemption which may allow you to buy your property back after it was sold in foreclosure.
As for how long the deficiency judgment can last, that will depend on how long it takes you to pay off the deficiency. This process can take even longer if you ignore the court order and your lender decides to pursue more legal action against you.
Don’t wait until it’s too late. This process can be time consuming and time sensitive and homeowners should consider the benefits of having an experienced foreclosure defense attorney who can guide them through the process and make suggestions that may benefit the end results.
Get Help With a Deficiency Judgment From an Experienced Foreclosure Defense Attorney
With the help from a foreclosure attorney you can feel better knowing you’re in the hands of a professional who is ready to fight for you, your home, and your financial wellbeing. Denbeaux & Denbeaux is a trusted New Jersey foreclosure defense law firm that represents the underrepresented.
If you are facing a deficiency judgment as a result of foreclosure, it’s important for you to take the right step to save your home, and fast. You can set up a free consultation today to learn how Joshua Denbeaux may be able to help your case.
