Florida Might Prohibit Deficiency Judgments in Homestead Foreclosures
The 2010 Florida Legislature is considering a bill that would prohibit deficiency judgments in foreclosures of homestead property.
If adopted and signed into law, HB 35 would take effect on July 1, 2010. It would prohibit the lender obtaining a deficiency judgment when foreclosing on a Florida homestead.
This would mean that the lender could only recover from the sale of the homestead at the courthouse steps. The lender would not be able to get a personal judgment against the borrower for the shortage between the sale price and the loan amount.
The bill is silent with regard to whether a lender may elect to sue only on the promissory note and not sue on the mortgage. If this was not prohibited, then a lender could get a personal judgment on the note by electing not to foreclose the mortgage.
The Legislative Session only began on 3/1/10. Who knows whether this bill will become law?
Jim Martin 3/13/10
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