Deficiency Judgments. Susan Francis Maryland Volunteer Lawyers Service 443-451-4084 [email protected] What is a Deficiency Judgment?. Deficiency
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Servicers only go after strategic defaulters, those people who are current on their mortgages but decide to walk away from a property because its value has sunk so far below their loan balance they have no hope of recouping the loss.
Fannie & Freddie criticized for not pursuing enough deficiency judgments
Servicers won’t go after those that have been through foreclosure because of financial hardship because they don’t have the assets or income needed to satisfy a deficiency judgment
But, we get calls from individual with deficiency judgments
The timeline was a bit undefined. Servicers had either 3 or 12 years (if under seal) to pursue a deficiency judgment. With the ability to renew the judgment for a second matching period of time.
Takes effect July 1
Secured party may issue a deficiency judgment within three years of the final ratification of the auditor's report following the sale.
Clarifies that this new limitation will apply to a owner-occupied residential property (determined at the time an Order to Docket is filed).
Retroactive protection for homeowners that have already had their houses sold at foreclosure or will have them transferred prior to July 1, by limiting the time period to the shorter of 12 years or July 1, 2017.