As recently reported many legal analysts believe that lenders will file a barrage of lawsuits over the next few years as a way to recoup their losses from deeds in lieu of foreclosure, foreclosures and short sales.

Although the legal analysts may be accurate, the recent activity at my office indicates that lenders aren't waiting and are already holding the proverbial gun to the borrowers' head.  Just this past week alone, I met with numerous clients that had their real estate agent negotiate their short sale. Each of these clients, after reviewing the short sale approval provided to them by their real estate agent, realized that the lenders were not releasing them from the debt. However, their real estate agents told them that they should close and not worry about a deficiency as banks won't sue homeowners who negotiate in good faith. Uncomfortable with the information, they immediately sought the advice of an experienced Florida Foreclosure Defense Attorney.

After my review of these short sale approvals, I found that the 1^st mortgage lender was not releasing them at all and the 2^nd mortgage lender had each homeowner executing a settlement agreement wherein the homeowner was required to pay off the difference between the short sale price and what they owed on the 2^nd mortgage lender. Now not only would the 1^st mortgage lender be able to sue them for the difference, the 2nd mortgage lender had them responsible for the difference between the short sale price and what they owed on the 2^nd mortgage. Thankfully, each of these homeowners sought the advice of an experienced Florida Foreclosure Defense Attorney, before they agreed to close the short sale.  By agreeing to such terms you are not helping yourself, but instead the bank and your real estate agent.

I continue to hear from far too many clients that their real estate agent told them they shouldn't worry about a deficiency as banks won't sue homeowners who negotiate in good faith. Don't take anyone's word for it, get it in writing! Even if the bank doesn't pursue legal action, they can sell the debt to a collection agency at a steep discount and they will employ their usual aggressive and disruptive tactics to collect.

Unbeknownst to most Florida homeowners, Florida law allows banks five years from the date of the sale to file for a deficiency judgment and up to 20 years to collect. They can garnish your wages or make claims on your assets.

If you are facing foreclosure or considering a short sale, you should consult with an experienced Florida Foreclosure Defense Lawyer not your real estate agent. These are legal matters, and without a specific written agreement between you and your lender, you are exposing yourself to the possibility of being slapped with a huge judgment for the outstanding mortgage debt, the difference between what your home sold for and the amount that you owe on your mortgage.

Get legal advice, understand your rights, and know your options!