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Foreclosed Homes Sold for More than Debt Owed

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In the state of Florida when a debtor falls behind on mortgage payments, the lender, usually a bank, must file a lawsuit in a state court which typically results in putting the home into foreclosure.

Once the home is foreclosed the court schedules the sale of the property. Frequently the home is sold to the highest third-party bidder or becomes Real Estate Owned (REO).

Once the home is sold or becomes REO, the money made from the foreclosure is used to pay back the lender/bank.

The difference between the sale price and the total debt is called a "deficiency". In Florida, lenders are able to obtain a deficiency, or additional money still owed through the foreclosure action or through a separate process.

Unfortunately lenders have been able to sell the foreclosed home at a cost that far exceeds the amount of debt original owed by the debtor. Knowing this information debtor often inquire if they may obtain the extra amount.

Any funds from sales that have not been used to pay off debt by the mortgage company are normally remitted to the court. For debtors to obtain that amount they must file a motion to distribute the balance. The motion must be filed with the clerk of the court that issued the sale of the foreclosed home. Once filed the debtor must schedule a hearing with the court and to serve the plaintiff from the foreclosure action.

We at Timothy J. Sierra Attorney at Law would like to state that our blog posts and links, on our web page or any other social media outlet, to any other web pages are not intended for legal advice. We are not responsible for third party website information. If one is in need of legal advice please contact an attorney directly.

Source: Nolo Law | Florida Foreclosure

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