Last Update: 5/7/2017
What happens when you get a letter from a debt collector — like Dyck O’Neal — related a deficiency from a foreclosure or short sale of a Florida home?
WARNING FROM US: First things first, please be aware that you should be on alert if you receive one of these debt collection letters: it is our experience that by the time you receive one of these Dyck O’Neal debt collection notice letters, a lawsuit has already been filed at the courthouse by Daniel C. Consuegra, Esq., to collect on the deficiency.
This is happening even though the notice that the borrower receives from Dyck O’Neal states that the borrower has 30 days to dispute the validity of the debt or it will be deemed accepted.
What’s Happening Here? What’s the Hurry?
There is a deadline that the banks have to meet. This deadline is July 1, 2014, and it is set by Florida Statute 95.11, new statutory language that was passed last year by the Florida Legislature. From this new law:
Section 2, ch. 2013-137, provides that “[t]he amendments made by this act to s. 95.11, Florida Statutes, apply to any action commenced on or after July 1, 2013, regardless of when the cause of action accrued. However, any action that would not have been barred under s. 95.11(2)(b), Florida Statutes 2012, before the effective date of this act must be commenced within 5 years after the action accrued or by July 1, 2014, whichever occurs first.
This new law changed the statute of limitations’ time deadline for lenders to go after old foreclosure deficiencies. The law draws a line in the sand: the banks must file a foreclosure deficiency lawsuit on all old foreclosure cases BY the deadline date of July 1, 2014.
So, lenders who have procrastinated and have not sought to pursue those deficiencies sitting on their books, are now scurrying to get lawsuits filed down at the courthouse or be “time barred” from collecting that deficiency amount.
For details on how this works, read our earlier post, “Florida Deficiency Foreclosure Claims: Banks Now Have One Year Statute of Limitations Deadline to Pursue the Deficiency.”
What Should You Do If You Get a Debt Collection Letter on a Foreclosure Deficiency in Florida?
There’s no law that requires you to do anything, but if you ignore that letter then you are going to face collection efforts as well as a lawsuit seeking a judgment, in the amount of the deficiency, which will be filed in the county where the real estate sits.
(As a reminder, the deficiency is the difference between the mortgage balance and the foreclosure sales amount and any attempt to collect that amount from you is heavily regulated by Florida and Federal law.)
Getting advice from an experience Florida foreclosure defense lawyer is important here. You may have substantive defenses regarding the underlying foreclosure as well as procedurally based arguments to advance, such as:
- Was the notice proper under Florida law?
- Is the lawsuit with proper legal foundation regarding the deficiency?
- Can they legally substantiate the claimed amount here?
- Did they agree to not go after a deficiency judgment as part of your foreclosure or short sale?
- What is the correct value of the property?
We are finding that Florida borrowers are shocked to learn that while they assumed that their approval letter for the short sale, or the deed-in-lieu-of-foreclosure deal, ended everything and that the bank had written off the mortgage balance, that all that really happened was that there was a release of the mortgage against the property, and there has been no legal release of the borrower from the debt.
Bottom line: if you were involved in a Florida foreclosure or short sale, then you need to confirm the status of the bank’s right to seek a deficiency against you. Act now, even if you are pretty confident that you are safe from a bank’s collection actions.
Unfortunately, lots of people are thinking that they’ve put things behind them and are being surprised to learn that their mortgage lender doesn’t see things the same way. Protect yourself by being aggressive in determining your legal rights, because Florida lenders are being very aggressive in claiming their rights to deficiency debts these days.
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