There are Hidden Risks Haunting Foreclosures – Debts that can Hound the Victim for Decades
One cannot rest even after enduring the trauma of foreclosures – there are hidden risks that can haunt the victims for decades. One 
of the unfortunate preys is John Ericksen who owned a house worth $500,000 ten years ago; it was on Juno Beach just steps away from the sea. In 2010 the bank seized it but that was not the end of his story.
Last November Riverside National Bank won the court case claiming $151,461 against Ericksen who was a handyman surviving from one job to another. He now camps in a small trailer in Ocean Tide Park for mobile homes in Riviera Beach.
In the “deficiency judgment” the bank has claimed that 59 years Ericksen continues to owe on the loan because the sale proceeds from the house did not cover the entire due amount. It took Erickson by surprise that the bank was still out to squeeze money out of him. But he quipped, “Good luck with that on. I’m pretty much out”.
Banks are given five years time in Florida to file for this deficiency judgment; they are allowed two decades to collect the same. But the numbers of deficiency claims have gone down to negligible numbers since the onslaught of the foreclosure crisis. Since the busting of the bubble Palm Beach County has been flooded with over 100,000 foreclosure cases.
Palm Beach Post made a review of the court records and found out of thousands only 133 deficiency claims had been filed during the period stretching from 2006 April till 2010 November on foreclosed homes. These were initiated by 88 servicers/lenders. Out of these, 68 have been granted the right to follow up the deficiency. Most of the lenders who have been awarded these judgments are small local banks.
According to defense attorneys representing foreclosed homeowner as well as experts in mortgage matters, this deficiency judgment is not an empty threat. Right now the banks are up to their necks managing foreclosure to give attention to this side of the issue and chase the amount that was short. For the house owners who thought that it was curtains with the seizing of their homes the days ahead could be worse if banks shift gears and focus on deficiency. This possibility in the coming years cannot be dismissed.
Lawyer Melva Rozier of Palm Beach said, “In two or three years the banks are going to get caught up and they will want to get that money back on their books”.
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