On behalf of financial institutions like Fannie Mae and Freddie Mac, as well as other mortgage players, Floridians are being pursued by debt collection companies for money they still owe on foreclosed homes. To this end, debt collectors are chasing down borrowers for the money they still owe by freezing their bank accounts, garnishing their wages and seizing their assets.
As Reuters reports, although the houses have been sold, using a legal tool known as a “deficiency judgement,” lenders are haunting borrowers by these zombie-like debts, as the proceeds of those sales were often not enough to cover the amount of the loan, plus penalties, legal bills and fees.
“Just because they don’t have the money to pay the entire mortgage, doesn’t mean they don’t have enough for a deficiency judgment,” said Florida foreclosure defense attorney Michael Wayslik, according to Reuters.
It’s hard to keep track of the number of lawsuits nationwide, but in foreclosure-ravaged regions like Florida, Ohio and Illinois, the cases are surging.
In Florida, in the past year alone, at least 10,000 lawsuits have been filed, representing hundred of millions of dollars of payments, Reuters reports.
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