Maryland homeowners shocked by deficiency judgments and collections

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Maryland homeowners shocked by deficiency judgments and collections


The Washington Post reports that “Years after foreclosures, old debt haunts homeowners….Lenders are filing new motions in old foreclosure lawsuits and hiring debt collectors to pursue leftover debt, plus court fees, attorney’s fees and tens of thousands in interest that had been accruing for years.” – Kimbriell Kelly

After going through foreclosure, many families assume that the mortgage debt is satisfied as they focus on restoring their financial health. In Maryland, it appears that debt collectors have up to 36 years to pursue homeowners for amounts owed on deficiency judgments.

Lenders have learned that collections are doubtful if they take place a short time after a foreclosure. Experience has shown that if they wait a few years to give the mortgage borrowers time to recover, the chance of collecting the deficiency will be greater.

Some lenders are targeting strategic defaulters with collection actions. If mortgage borrowers were able to pay other bills but not their mortgages, they could be considered to be strategic defaulters.  Part of the strategy of collection efforts is to deter future strategic defaulters.

Those that have gone through a foreclosure and did not file bankruptcy to clear their debts have long term reasons to be concerned with a possible deficiency judgment and collection actions.  Once a judgment is entered, a lien attaches to real estate owned.  A Chapter 7 bankruptcy could clear debt but those filings are now available to people earning no more that the state’s median income, which is $108,915 for a family of four in Maryland.


Years after foreclosures, old debt haunts homeowners


Peony, Kentlands IMG_5461

Photograph by Roy Kelley using a Canon PowerShot G11 camera.

Roy and Dolores Kelley Photographs

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Roy and Dolores Kelley Photographs

Roy Kelley and Associates


Roy Kelley, Associate Broker

Realty Group Referrals (Retired from RE/MAX Realty Group)

6 Montgomery Village Ave., Suite 200

Gaithersburg, MD 20879

Main Office:  301-258-7757 (You will not reach me at this number)

Send an email message if you need my phone numbers. I will be happy to recommend a real estate professional if you are moving to the area.


Re-Blogged 1 time:

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  1. Lynn B. Friedman 06/17/2013 06:47 AM
Real Estate General Information
Maryland Montgomery County Gaithersburg Kentlands
deficiency judgments
roy and dolores kelley photographs

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Lynn B. Friedman
Atlanta Homes ODAT Realty Call/Text 404-939-2727 Buckhead - Midtown - Westside -- and more ... - Atlanta, GA
Concierge Service for Our Atlanta Sellers & Buyers

Dear Roy,

A very important message to share with the public.

Everyone needs to have the full information when they make a sales decision. Sadly it doesn't happen all the time.

Thanks for bringing up the topic.
Have a happy day -

Jun 17, 2013 06:38 AM #1
Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Roy, in Maryland, I think a lot of homeowers went through the process without getting proper legal representation.  And I think many of the agents who advertised themselves as short sale and foreclosure specialists are vulnerable to legal action - like many were sort of practicing law without a license. 

Jun 17, 2013 06:53 AM #2
Clint Mckie
Desert Sun Home, commercial Inspections - Carlsbad, NM
Desert Sun Home, Comm. Inspection 1-575-706-5586

Hi Roy,

36 Years? That's crazy, but money owed is just that money owed.

In many cases the Chapter 7 is the best avenue for a successful rebuilding of their credit.

Have a great evening in Gaithersburg my friend.

Best, Clint McKie

Jun 17, 2013 08:28 AM #3
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

I just jnew that all that debt hidden away in the back of dfiling cabinets and computers would come back out one day and sold to collectors as a way to recoup the losses. I hear of it it increasing. Hopefully people got debt forgiveness in writing.

Jun 17, 2013 09:13 AM #4
Rob Thomas
Prestige Homes of The Tri Cities, Inc. CALL....423-341-6954 - Bristol, TN
Bristol TN-VA & Tri Cities Agent, ABR, GRI, e-Pro

yes, banks are savvy and know how to get their money if it IS years and years after...

have a great night


Jun 17, 2013 10:41 AM #5
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Thanks so much for your comments. It is good to receive your feedback.

Have an outstanding week.


Peony, Kentlands IMG_5462

Photograph by Roy Kelley using a Canon PowerShot G11 camera.


Roy and Dolores Kelley Photographs

Jun 17, 2013 11:16 AM #6
Conrad Allen
Re/Max Professional Associates - Webster, MA
Webster, Ma, Realtor

Wow Roy.  36 years to collect the debt.  That doesn't seem right.

Jun 17, 2013 08:21 PM #7
Jeff Pearl
RE/MAX Distinctive / LIC in VA - Lovettsville, VA
Full Service Full Time Realtor

Hi Roy, it's awful. I blogged about this article as well. I think every owner and agent involved in short sales need to read this acticle. I agree with Patricia, many agents who provided what amounts to legal and tax advice will be facing legal challenges of their own. Love your flower photos!

Jun 17, 2013 08:30 PM #8
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Roy, no clue the lender's rights extended that long! Whether you short sale or go through the foreclosure process, best to get any forgiveness of debt in writing! And, if you are advising people, make sure you don't cross the line into the unauthorized practice of law! Enjoy your day!

Jun 17, 2013 08:42 PM #9
Anita Clark
ColdwellBanker SSK Realtors ~ 478.960.8055 - Warner Robins, GA
Realtor - Homes for Sale in Warner Robins GA

Roy: I can see a bunch of lawsuits on the horizon.  36 years is an incredibly long time to be able to go after folks to recoup money owed.

Jun 17, 2013 09:12 PM #10
Stan Chernecki
Devstar Realty - Anthem, AZ

Really this is horrifying.  How could a homeowner get back to solid financial footing? 

Jun 18, 2013 11:17 AM #11
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Thank you very much for sharing your thoughts. 

I hope you are having a very special week.


Kentlands, Flowers IMG_5431

Photograph by Roy Kelley using a Canon PowerShot G11 camera.  


Roy and Dolores Kelley Photographs

Jun 20, 2013 09:08 AM #12
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