Spend Your Time Making Money

Leave The Debt Collection To Us

How can I collect on a mortgage foreclosure deficiency?

by | Apr 15, 2019 | Business Debt Collection, Massachusetts Debt Recovery

There may be times when a mortgage lender might not be able to fully recover debts after a real estate property or asset is sold. When the sale proceeds are not sufficient to repay the loans, a deficiency may occur. A mortgage lender may file an additional lawsuit that will help in recovering the foreclosure deficiency owed by the borrower. An experienced debt collection attorney can collect foreclosure deficiencies, provided that the appropriate notices are timely given to the borrower. Also, a lender has to be aware of the shortened two-year statute of limitations in which to pursue deficiencies arising from mortgage foreclosure. The experienced foreclosure deficiency collections attorneys at the Law Offices of Alan M. Cohen & Associates LLC can help turn your foreclosure deficiency into payment.

Possible Ways of Collecting Mortgage Foreclosure Deficiency

A mortgage lender in Massachusetts can opt for either a judicial or a nonjudicial form of foreclosure. The most common of them is the nonjudicial way where you started the foreclosure process without seeking court orders because the mortgage had power to sale clause attached to it. Now that a deficiency has risen because of a difference between the foreclosure sale price and the mortgage debt has occurred, there is a two-year statute of limitation to file suit to collect the deficiency. For this purpose, a skilled collections attorney will be required to understand the specifics of your case and file a lawsuit for you. When a deficiency judgment is won, you are eligible to seek the difference from the borrower.

Your rights to collect a deficiency on a mortgage are inscribed in the Commonwealth of Massachusetts General Laws, Part III, Title III, and Chapter 244 Section 17B. If you wish to obtain a successful deficiency judgment, you must have sent Notice of Intent to Foreclose and of Deficiency after Foreclosure of Mortgage prior 21 days of the sale. Now after the sale when a deficiency has risen, a deficiency lawsuit must be filed within two years of the foreclosure as per General Laws, Part III, Title III, and Chapter 244 Section 17A. Finally, as per General Laws, Part III, Title V, and Chapter 260 Section 20, you as a lender have twenty years to collect the dues on deficiency judgment, else after twenty years, the debt will be presumed satisfied. Missing deadlines and not filling appropriate papers can result in a potential loss. These are complex legal procedures and collection attorneys at Law Offices of Alan M. Cohen can help in understanding these. They without wasting any time the Law Offices of Alan M. Cohen & Associates LLC will file your deficiency judgments and seek payment of difference immediately for timely recovery. Experienced collection attorneys are aware of the deadlines and how can a possible case be pursued. Because every deficiency case may be different in nature, we support our clients from the start of the case until all collection is made. It may require filing a lawsuit on the deficiency judgment which seeks to attach bank accounts, rights to future earning related to stocks and dividends, and a portion of insurance policy where applicable.

To collect deficiency payments, another legal option is to seek a judgment lien on the borrower assets. A lawsuit is filed that provides a mortgage lender or bank with a judgment lien on other real estate or property assets if they exist. The execution issued by the court in the deficiency judgment litigation is a lien which can be recorded in the county where other real estate exists, if any. If you have a judgment lien from a different state other than the Commonwealth of Massachusetts, you should seek support from experienced collections attorneys from Law Offices of Alan M. Cohen & Associates LLC to domesticate and enforce your foreign judgment. When done, a creditor gets the same rights that a local creditor would.

Additionally, a deficiency judgment, like any other judgment can also provide a creditor with access to personal property and assets as well. When a real estate asset is not present or sufficient to fulfill the deficiency, jewelry, art items, electronics, business assets, and equipment may also be used. An experienced and skilled collection attorney will have the means to assess the value of assets and how they can be seized and sold for your benefit. Because mortgage lenders need to comply with their own high standards of collection and business practices, a collection attorney will ensure that all lawful means are applied for relentless recovery of the deficiency payment, while relentlessly working to aggressively and ethically get you paid. This includes the timely filing of lawsuits for foreign judgment enforcement or applicable lawsuits for the discovery of assets.

Another way to help collect mortgage foreclosure deficiency is to seek wage garnishments. Wage garnishment will require filing a lawsuit on an existing judgment. When a court order is issued, the copy is sent to the employer of the borrower, and a certain percentage can be collected every pay period which will help complete the mortgage foreclosure deficiency gap. Interestingly, a wage garnishment can work on other income too, which may include rental income, insurance proceeds payments or pensions. Collection attorneys are expert on using legal means to identify all available forms of income that can be used for deficiency payment. When a credible place of employment has been established, with proper evidence of other forms of income that can be used, a collection attorney will file the lawsuit and after winning it, proceed with the required money collection. Again, this is a highly complex legal matter and you can trust the top-rated award-winning collections attorneys at the Law Offices of Alan M. Cohen & Associates LLC to strongly advocate for your interests and relentlessly aggressively pursuit payment of the bad debt which is owed to you by your debtors. It should be noted that there may be limits to how much garnishment can be applied to an individual’s income to fulfill the deficiency and other a collection might seek other legal ways where wage garnishments are not sufficient to fulfill the mortgage foreclosure deficiencies. This is a relentless and aggressive way to collect deficiency judgments and subsequent payments. Through the proper discovery of assets and place of employment of debtor, an appropriate payment schedule can be made to ensure debtor honors their payments and is aware of potential future lawsuits if they fall behind on their payments.

These other means can include the use of bank account attachments. A court approved bank attachment on non-exempt assets can enable a mortgage lender or creditor can use all available amount in the bank account of a debtor to fulfill the balance related to a deficiency judgment. Bank account levy lawsuit requirements and court rulings may vary as per state law. In the Commonwealth of Massachusetts, bank account levy can be applied using Chapter 106: Section 4A-502. It can be easier to apply if checks were received from the borrower bank before, and no discovery is needed. Even if a discovery is required to assess potential bank accounts that can be sued, a collection attorney can help in this matter. Under a bank account levy, the borrower’s bank accounts can be frozen, and the amount may be directed to the creditors for the fulfillment of deficiency commitment. The credit process applied here needs to be done in a formal and legal manner for the creditor to receive part or all of the amount present in borrower’s bank accounts. Because debtor bank accounts are frozen, a judgment debtor may wish to engage in negotiations and settlements for timely payments.

Our Process

As mentioned above, there can be a variety of ways in which a collection attorney can help you in mortgage foreclosure deficiency collection. Because the Law Offices of Alan M. Cohen & Associates LLC have experience of over thirty-five years to serve their sophisticated mortgage lenders and financial clients, there is a philosophy and certain methodology that we have developed to help get you paid. Using a strategic way to collect deficiency judgments is the specialty of only the best collection attorneys in Massachusetts.

No matter you are a bank, credit union, hard money lender, soft money lender or other mortgage lender, when you come to us, be assured that we start the process of assessing your case instantly. When we start your case, our competent attorneys start going through the file we receive from you. The file may contain details of individual borrowers, foreclosure dates, legal contracts, name and details of properties, and the deficiency balance that may have occurred due to a difference between foreclosure sale and amount of loan. After assessing the file, drafting of a comprehensive collection suits takes place that may seek to attach real estate assets, freezing bank accounts, and reach and apply income stream. Although at times it might be hard to seek these attachments as part of the lawsuit, we have a proven record of strongly and more often than not successfully advocating with the court to obtain pre judgment security and post judgment collections on behalf of our clients. This relentless and aggressive means of pursuing the deficiency judgment and balance can lead to a settlement agreement that is not only based on our client’s terms but is honored by the borrower too.

A settlement agreement can help you receive deficiency money in the form of stocks in a company, a portion of life insurance, and pledges to rights to both future stocks and payments on due maturing promissory bonds, and rights to mortgagees on properties both in Massachusetts and outside. To ensure that the debtor continues to pay their share of the deficiency, many of our agreements provide them with incentives to continue with their payments. In case a debtor breaches the settlement agreement, an Agreement of Judgment can be filed against them for the full amount owed by them. We immediately start exercising our pledges and collect all monies owed to the debtor by third parties. Throughout this process, we take great care and treat all defendants with respect by working with them after filing the judgment. When a debtor still fails to respond, we may seek to liquidate their assets, including insurance proceeds so that the cash value is provided to the creditors. There are chances that a debtor may continue to negotiate and respond with possible lump sum payments that may help end the deficiency.

Final Thoughts

When there is a foreclosure deficiency that mortgage lenders and financial clients need advice and assistance on, the experienced Massachusetts deficiency collection attorneys at the Law Offices of Alan M. Cohen & Associates LLC are the ones to contact. As highlighted above, there are a variety of ways in which a deficiency can be collected. From the first phase of assessing the case, to relentlessly pursuing the debtor until a negotiation or full payment is received, our collection attorneys never give up. We go to the mat for you.  All of the steps are taken in light of the legal and ethical code, while fully respecting debtors.

When we assess a case, we look for all options that are possible to ensure a foreclosure deficiency is paid. The use of bank account levy, wage garnishment, and judgment lien can be instrumental. Above all, it is the final settlement agreement that can make the real difference. If the right collections attorneys are not chosen, the case may drag on for years without acceptable results. However, the aggressive and experienced collections attorneys at the Law Offices of Alan M. Cohen & Associates LLC always do their best to find various ways from lawsuits to judgments that can seek payments from debtors. Experienced collection attorneys at Law Offices of Alan M. Cohen & Associates LLC with over 35 years of experience have skillfully developed the means to assess a debtor and their assets for a thorough valuation and guide on the best possible course to use when pursuing payments. For more information about how the award-winning debt collection attorneys at the Law Offices of Alan M. Cohen & Associates LLC can help collect mortgage foreclosure deficiency click here or call 508-763-6604 or email [email protected].