Deficiency Judgements Scare Many At Risk Idaho Home Owners

For those of you who may not know what a deficiency judgement is, it is a judgement received after a foreclosure sale fails to produce enough money to pay back the full loan amount. To clarify, if a home owner doesn’t make their payment and the bank refuses to accept a deed in lieu of foreclosure, or any short sale contracts that may have been offered on the property, the bank can file a deficiency judgement. This judgement basically allows the bank to pursue the homeowner for the difference in the balance. Typically the bank will simply send a tax form to the home owner which states that the bank basically paid them the difference so the bank can report the loss on its taxes and the homeowner has to as well. A deficiency judgement can also come in the form of  an official court judgement resulting from a lawsuit in the above indicated difference between loan amount and sales price. In the Boise area foreclosures have hit hard and some of the hardest hit areas include Nampa and Caldwell homes. The reason for this is the highest unemployment rate in the state. In fact, the Canyon County job market posts unemployment rates that are competetive with areas of the midwest like Ohio, Michigan and Illinois. Even places located on the fringes of Canyon County have been hit hard with the ripple effect from high unemployment. Kuna homeowners have been reporting higher levels of deficiency judgements resulting from the inability to pay their mortgage payments as well. The deficiency judgements that Kuna homes have been seeing are typically less than one hundred thousand dollars due to the prevelance of less expensive homes in the Kuna area. Althought there have been recent bright spots reported in the Kuna real estate market, overall trends are not what most would call "good" yet. Deficiency judgements in Idaho threaten more than just Kuna home owners. They effect the entire valley and will continue as long as foreclosures negatively effect our local real estate market. There really is a limited amount of options homeowners have in protesting and appealling the deficiency judgements. The only real angle that anyone can use to refute them is to claim that the appraisal amount when initially purchased wasn’t acurate, but would require a lot of homework and a great lawyer. Many lawyers are not even willing to entertain the option of suing to remove a deficiency judgement, but it is always advised to seek the counsel of an attorney in regard to legal matters. With mortgage defaults set to crest at an all time high in August, you can see that deficiency judgements will not be a temporary topic in real estate circles across the nation. They will be with us for quite some time and the best thing many homeowners can do is simply make their payments and wait for appreciation to bring their values back in balance with their liens.

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