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My wife and I own two properties. The Sante Fe river land with no house is worth between $100,00 and $250,000 depending on a future appraisal. We owe $16k. The house we live in now was supposed to be a flip. Purchased in 2004 for $86k, refinanced twice, all new electical, plumbing, walls, insulation, but still not finished. This house is solely in my wife's maiden name appraised in 2006 at $174k, owing $164k. It is now probably worth $120k. The river property is in both names and we owe $16k. We also have $69k in credit card debt with $34k on a 5 year payoff plan with Bank of America at 5.25%. The rest is killing us monthly even though we make $94k annually with no dependents. We can't finish the flip house and it is costing us $1,500 a month. Question: Can we walk away from this flip house (give it back to the bank) or will they come after the joint river property and garnish our wages?
State/Country relating to Question: Florida Already Tried: Consumer credit counseling, a bankruptcy lawyer
Is all of the property in New Mexico?
We live in High Springs, Florida where, believe it or not, the Sante Fe river branches off of the Suwannee river. Both properties are in Alachua County, Florida.
In Florida, a mortgage foreclosure does not automatically result in a deficiency judgment. Just because you lose a property at foreclosure does not mean you will remain personally liable for money owed to the lende . To obtain a deficiency judgment against the borrower the foreclosure sale the mortgage lender has to file a motion for a deficiency after the foreclosure sale, and the court must hold a separate evidentiary hearing on the lender's request for deficiency liability. At the evidentiary hearing the mortgage lender has to show the court evidence that the property's value on the sale date was less than the note balance. The borrower can get his own appraisal or can use the government's tax assessed value as evidence of value. If the property was worth more than note balance on sale date the court will not give the mortgage lender a deficiency judgment against the borrower. The borrower may present evidence of value in the form of a formal appraisal or other less formal opinions of value such as the local government's tax assessed value.
If they pursue a deficiency judgment you should hire an attorney to defend the deficiency. In many cases, an attorney can use procedural defenses and substantive lending law to defeat a deficiency claim, and the attorney can negotiate an acceptable settlement for much less than the total deficiency liability in most cases.
Many lenders are waiving the deficiency judgment in the original foreclosure process and this is something that your attorney can ask for. Here it seems that you should walk away.
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