A series of lawsuits are predicted to hit borrowers in the coming years filed by foreclosure lenders who will try to recoup losses, legal and real estate analysts have claimed. According to them, banks and lenders who fail to get enough money from foreclosure auctions to cover mortgages owed by homeowners will likely sue these homeowners.
Under foreclosures in Florida law, lenders are given five years starting from the time of sale to file for deficiency judgments and they also have 20 years by which they can collect for these so-called deficiencies. The law also allows them to make claims on the assets of borrowers.
Prior to the housing crisis, not a lot of lenders bother with filing lawsuits since majority of homeowners do not have enough assets that would make it worth banksí time to sue them. However, the increasing number of foreclosure-troubled homeowners, including owners who have properties under Pompano Beach pre foreclosures, has created a group of borrowers who are in possession of investments that are seen as lucrative by these lenders.
Analysts have predicted that foreclosure lenders will likely sue those owners who caused damage to properties prior to losing them to foreclosure and those who walk away from their homes once they were unable to pay for the mortgage.
They added that lenders will not likely sue borrowers who defaulted on their loans if the default is due to job loss or other uncontrollable circumstances. Homeowners who negotiated with banks and lenders in good faith are also unlikely to face the legal wrath of lenders.
Real estate legal practitioners have advised homeowners and borrowers not to rely on the verbal commitment of lenders but instead get their promises not to sue in writing. Some market observers have predicted that if lenders fail to gain profit from real estate foreclosures for sale, they might sue borrowers just out of spite.
However, foreclosure lenders have denied that this would be the case or that lawsuits will be filed against borrowers just because lenders fail to regain what was owed them. They argued that suing someone takes a lot of time and expenses and lenders will not likely bother.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.