The Ramifications of Foreclosure
Individuals who are facing
foreclosure should be aware of the possible ramifications associated with it. A common
misconception surrounding foreclosure is that once your house has been
auctioned off you are free of all debt to the bank or lender. In Florida,
this is not true, as there can be other financial liabilities that you
will still be held to, especially if your home is sold at a deficiency.
If you are threatened with foreclosure, you must contact a
Sarasota foreclosure defense attorney to discuss the ramifications and how to avoid future serious financial damage.
The three most common ramifications of a mortgage foreclosure are deficiency
judgments, tax liabilities and a drastic drop in credit score. Deficiency
judgments consist of the amount of your mortgage sale of your house. If
you owed the bank $10,500 and your house sold for only nine thousand dollars,
then you can be held responsible for a deficiency judgment for $9,500.
The bank could take legal action to sue you for this difference. Tax liabilities
are tied to debt forgiveness. If a bank decides to forgive any portion
of the unpaid debt, then you will be free from paying it back - however,
the amount of debt forgiven can still be taxed as income by the federal
government. Lastly, your credit score will be significantly affected if
a mortgage foreclosure is completed. How these matters are resolved is
of great concern to many homeowners who are dealing with an
underwater mortgage, and are now obligated to paying for a property that has plummeted in value.
What are my Rights?
Florida state law requires all foreclosures go through the court system
which means all homeowners retain these important rights:
Right to original documents- supporting evidence for your defense can be obtained from the original
loan documents. When requested, banks must allow you to view your note
and mortgage. Lender errors and sloppiness can be detected and could possibly
lead to a dismissal of the foreclosure action filed against you.
Right to defend- you have the right to defend yourself from any foreclosure claim. This
means you are allowed to challenge the bank's suit in court and gain
legal representation for your court hearing.
Burden of proof lies with the lender- the lender has the burden to prove that they are entitled to obtain a
final judgment of foreclosure. They must prove that they are the proper
party to bring the mortgage foreclosure action and they must prove that
they satisfied all conditions prior to the filing of the foreclosure.
In many cases, the lender's foreclosure action is dismissed for their
failure to satisfy their burden of proof.
Right to counterclaim- each homeowner can chose to sue the bank or lender asking the Court to
remove the mortgage from the property or for performing unfair and illegal
lending practices or other violations of state or federal law.
Get Legal Protection
You need to do everything you can to defend yourself during this turbulent
time. A threat of foreclosure can throw you into a spin of confusion,
trying to determine whether you should just walk away, or whether other
alternatives should be sought. Protecting your future financial health
and credit rating are issues that should be addressed with the help of
a qualified legal professional that has a depth of knowledge in the area
that will best serve your interests. Sheryl A. Edwards, a
Board Certified Real Estate Expert, has been in practice for over 19 years, and has helped many clients resolve
a threat of foreclosure successfully. We have educated countless clients
on the ramifications of foreclosure and the legal options to fight back.
We will do everything possible to assist you in resolving a foreclosure,
and to help you avoid filing bankruptcy. We consider this a last resort,
and there are likely other extremely workable options that could be undertaken,
allowing you to move on with your life without long term consequences.
Contact a Sarasota foreclosure defense lawyer
from The Edwards Law Firm, PL discuss the possible ramifications for your
situation as well as any options you may have available.