More Zombie Debt | Deficiency Judgments for Unpaid Condo Fees and Unsatisfied Mortgages Come Back to Haunt Past Owners
“In a few cases, they have gotten judges to help them freeze and confiscate the bank account of a former owner.“
Is this the next shoe to drop?
Florida is gliding quietly into a new and potentially painful part of the boom-bust cycle, where stacked-up “deficiency judgments” for unpaid condo fees and unsatisfied mortgages could come back to haunt past owners. Many of them thought they had escaped further costs when they handed their home over to their lender.
When a lender sells a foreclosed home for less than the mortgage, the difference — or “deficiency” — is typically registered in the court proceedings as being owed by the original borrower, but it is seldom paid.
The same thing can happen with unpaid condo or homeowner fees. Either as part of the bank foreclosure or through a separate foreclosure action, the homeowner or condo association can ask the court for a deficiency judgment. In either case, even if these debt instruments gather dust for years, they remain valid and are accruing interest at the rate of 6 percent to 18 percent per year.
Full article here…