Fannie Mae is ratcheting up its pursuit of deficiency judgment collections from hundreds of South Floridians this summer.
In June, a Texas-based debt collection firm filed about 110 lawsuits in Palm Beach County, more than 300 complaints in Broward County and nearly 200 in Miami-Dade County on behalf of Fannie Mae. A deficiency judgment involves the remaining balance on a borrower’s unpaid mortgage following a foreclosure sale. They were rarely sought by lenders until Fannie Mae’s recent actions.
A Florida law change that took effect in July 2013 shortened the period banks and mortgage firms can file for a deficiency judgment from five years to once year after a foreclosure sale is completed, according to the Palm Beach Post. That likely contributed to Fannie Mae’s urgency.
The newspaper spoke to several homeowner attorneys, who expressed surprise that Fannie Mae is getting so aggressive in going after the deficiency judgments. [Palm Beach Post] — Eric Kalis