A deficiency judgment is a judgment which may be entered by a court, if requested by the mortgage holder, after a judgment of foreclosure is entered and the property which is encumbered by the mortgage is sold by the clerk of court at the foreclosure sale. The amount of the deficiency judgment is generally the difference between the fair market value of the foreclosed property and the amount owed under the promissory note secured by the mortgage.

    Florida courts have held that a trial court, which has entered a final judgment of foreclosure, and where a foreclosure sale has been held, thereafter has discretion with respect to granting or denying a deficiency judgment; however, granting a deficiency judgment is more the rule than the exception. The creditor has the burden of proving that the fair market value of the property is less than the debt owed. Once the potential deficiency is determined, a court may review equitable considerations which may support denial of a deficiency award in whole or in part. To enter the deficiency judgment, the court which entered the foreclosure judgment must have personal jurisdiction over the defendant debtor against whom the deficiency judgment would be effective.

    Section 45.031, Florida Statutes (2008) deals with foreclosure sales by the clerk of court, and states that he amount of the bid for the property at the sale will be presumed to be sufficient consideration for the sale. A party may serve an objection to the amount of the bid within 10 days after the clerk files the certificate of sale. If the case is one in which a deficiency judgment may be sought and application is made for a deficiency, the amount bid at the sale may be considered by the court as one of the factors in determining a deficiency under the usual equitable principles.

    Under section 702.065, Florida Statutes (2008), in uncontested mortgage foreclosure proceedings in which the mortgagee (the creditor holding the mortgage) waives the right to recoup any deficiency judgment, the court is authorized to enter final judgment within 90 days from the date of the close of pleadings in the case.

    The above comments are only a brief summary of some aspects of deficiency judgments under Florida law, and the entitlement to, and amount of, such a judgment can vary from case to case depending upon the facts and circumstances.

The foregoing discussion is in summary form, and does not, and is not intended to, discuss all of the statutes, regulations and court opinions which affect matters included in the article. It is not intended as legal advice.