House bill proposes 1-year limit on foreclosure deficiencies

A bill introduced in the U.S. House of Representatives would limit the time frame for deficiency judgments against single-family homes and give protection to low-income households.

House Resolution 3566, also known as the Fairness in Foreclosures Act of 2011, would put a one-year limit on any judgment except in states that have shorter restrictions. Existing law would take precedence in those states.

Rep. Ed Towns, D-N.Y., introduced H.R. 3566 on the House floor Tuesday.

“A deficiency judgment after foreclosure seems to be one of the greatest injustices that occur to homeowners after they have gone through the arduous foreclosure process,” Towns said in a release. “Not only are they behind by thousands of dollars on their mortgage payments and facing public auction of their houses, the ordeal may continue indefinitely.”

The bill would also prohibit deficiency judgments against a borrower in a “low-income family,” and any deficiency would not be reported to credit agencies.

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Christian van't Vlie and Ivana Milosevic. Helping sellers and buyers successfully reach their real estate goals while keeping them informed every step of the way, disclosing all known facts and real estate practice procedures so that all involved parties can make well-informed decision. We care and we are at your service.

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