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120 FLORIDA Deficiency, Strategic Default and Florida Long-Arm By, Daniel C. Consuegra, Law Offices of Daniel Consuegra Florida has a reputation as a debtor friendly state due in large part to our homestead laws and news stories of celebrities moving to Florida to shield assets from creditors. Notwithstanding such stories, debt is very collectable in Florida. Deficiencies, the difference between the amount of the judgment and the value of the property on the date of the foreclosure sale, are being collected by those banks, servicers and investors willing to pursue this charged off debt. In 2014 our statute of limitations for deficiencies was shortened to one year, which predictably caused a large number of deficiency filings. At the time of these filings deficiency legal precedent was lacking, but litigation over the last two years has brought favorable deci- sions and results. In Florida there have always been two ways of reducing the deficiency to judgment. First, a motion for deficiency is filed post sale in the foreclosure case asking the judge for deficiency judgment. With a motion, questions of standing, jurisdiction and venue are resolved, service of process has been achieved and the filing fee is minimal. In many ways the motion is preferable especially since the court often retains jurisdiction to consider the motion in the foreclosure judgment. Second, the bank may file suit for deficiency judgment. A suit may be expedient as in the case where service of process was not perfected in the foreclosure. It is in the suit for deficiency that we have seen most of the litigation and favorable decisions. In the suit for deficiency, jurisdiction and venue are challenged on two fronts. First, the question has come up as to whether a suit is even proper when the court has retained juris- diction to consider the motion for deficiency. e courts have approved the suit overwhelm- ingly by deciding that our foreclosure statute unambiguously allows for the suit as long as there has not be a motion for the deficiency judgement filed in the foreclosure case and a ruling on that motion. Second, jurisdiction and venue have been challenged with the borrower arguing he may only be sued where he resides and not where the foreclosure was filed. Here is where we often encounter the strategic defaulter, that borrower who is able to pay but chooses not to do so because of lack of equity. In the current environment with the mortgage crises behind us, there is much less sympathy for those who walk away because doing so damages neighbor- hood property values and make mortgage loans more expensive for everyone. In Florida deficiency litigation we find the out-of-state borrower who came to Florida bought a home as an investment or for retire- ment and stopped paying when the property became upside down. ese cases are especially important in the area of deficiency recovery because these borrowers are often very collect- ible. e suit is filed in the county where the property was located with the court upholding jurisdiction and venue notwithstanding the fact that the borrower does not reside in that county. Venue is held proper because owning property in Florida specifically confers jurisdiction under our long-arm statute. Constitutional due pro- cess is satisfied because the courts have found that borrowers who have purchased homes and have foreclosure judgements against them have maintained certain minimum contacts with the forum state and would reasonably anticipate being haled into a Florida court to answer a de- ficiency and to do so would not offend notions of fair play and substantial justice. MEMBER Adriana M Montes, MBA Juris Doctor Candidate Owner, Real Estate Broker REO, Short Sale, Property Management & Acquisitions Director, Luxury Home Specialist, Multimillion Dollar Producer » Awarded #17 with 203 home sales in 2014 of Top 250 Latino Real Estate Agents in US! » Awarded #17 with 220 home sales in 2013 of Top 250 Latino Real Estate Agents in US! » Awarded #16 with 200 home sales in 2012 of Top 250 Latino Real Estate Agents in US! » Awarded #48 with 120 home sales in 2011 of Top 250 Latino Real Estate Agents in US! www.FloridaDreamsRealty.com 321.689.6258 cell - Adriana@FloridaDreamsRealty.com