What is a Mortgage Foreclosure “Deficiency” Judgment?

A mortgage deficiency judgment may be pursued by a mortgage lender after the sale of the real estate at a foreclosure sale. A deficiency judgment is a “money” judgment generally for the balance due on the mortgage note as reduced by the sales proceeds of the foreclosure sale.  A claim for a mortgage deficiency is usually brought as part of the original foreclosure action.

Limitation on Amount of Deficiency for Residential Hmortgage foreclosure deficiency judgmentomes

A new Florida Statute passed in the year 2013, limits the deficiency amount to the difference between the balance due on the mortgage note and the fair market value of the foreclosed home. This new Florida Statute, which went in effect on June 7, 2013, is called the “Florida Fair Foreclosure Act.”

Statute of Limitations to Pursue Mortgage Deficiency Judgment

In general, the statute of limitations on bringing an action for a deficiency judgment is 5 years. As to 1 – 4 unit family residential property, an action for a mortgage deficiency judgment must be brought within 1 year after the foreclosure sale or short sale.