Time to Get Your Head Out of the Sand and Pursue that Short Sale

Most everyone is familiar with the terms “strategic default” and “deficiency balance.”  In fact, over the years Berlin Patten has repeatedly addressed the importance of getting legal representation in foreclosure actions, short sales, and debt negotiation.  However, we have seen countless instances of people choosing to essentially bury their heads in the sand and ignore their foreclosure action.  Most of the time, this is under the false assumption that lenders would not seek a deficiency balance after the foreclosure action. 

Significantly, the Federal Housing Finance Agency recently posted an advisory bulletin to establish supervisory expectations for deficiency balance management at Fannie Mae and Freddie Mac.  The recent advisory bulletin should serve as a strong wake-up call as Fannie Mae and Freddie Mac are being advised to start collecting on deficiency judgments from borrowers that walked away from their homes. In fact, the advisory bulletin specifically states that “recovery of a deficiency balance may act as a deterrent to so-called “strategic defaulters.”

Once a deficiency judgment is obtained, the judgment can last for up to 20 years.  Additionally, the judgment may result in the garnishment of wages, attachment of bank accounts, and the forced sale of personal property. 

As always, if you have any questions regarding a deficiency judgment, we strongly recommend you to consult with your real estate attorney.  Please see the below link for more information on the Federal Housing Finance Agency advisory bulletin.



Berlin-Patten, PLLC


This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.

All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged.



3700 S. Tamiami Tr, Suite 200, Sarasota, FL 34236   P (941) 954-9991  F (941) 954-9992


247 S. Tamiami Trail, Suite 201, Venice, FL 34285  P (941) 955-9991  F (941) 484-9992


8130 Main Street, Suite 206, Lakewood Ranch, FL 34202   P (941) 907-9022  F (941) 907-9024  

Did you find this real estate law content useful, but need actual legal counsel?

Speak to a real estate attorney!

, , , ,

All That Glitters Is Not Gold

The COVID-19 pandemic (a/k/a the “coronavirus”), has hit very close to home when it comes to homeowners being able to make their mortgage payments on time (or at all). Where many Floridians are being furloughed or laid off from their employment, there is increasing anxiety over how that 1st of the month mortgage payment is…

Follow Up To “New Catch-22 In Short Sale Negotiation”

We have received tremendous feedback to our recent blog concerning lender(s) who are now forcing sellers to use auction companies to further market their property as a precondition to short sale approval.  Our previous suggestions to attempt to address the situation were (a) encourage the seller to incorporate language in their contracts to permit the…