Fannie Mae Hires Firm To Go After Zombie Mortgage Debt

This summer, hundreds of Florida residents found out they are now facing new ramifications for defaulting on their Fannie Mae backed mortgages. Fannie Mae has hired Texas based collections company Dyck O’Neal to aggressively pursue unpaid mortgage debt from Florida properties that were foreclosed on within the past five years. The lawsuits seek to collect deficiency judgments — the balance left on borrowers’ unpaid mortgages after deducting for what was recouped at a home’s foreclosure sale.

The wave of lawsuits is due to the change in Florida law that went into effect July 1, 2013 that reduced the timeline that banks and mortgage companies have to file for a deficiency judgment from five years to one year after a foreclosure is final, which is when the home is sold at auction. This means any cases that weren’t already timed out had just one more year to file.

Paul Baltrun, director of corporate development for the Law Office of Paul A. Krasker in West Palm Beach, told the Palm Beach Post, “The size of the judgments — we’re not seeing $30,000 — these are at a minimum of $100,000.”

Fortunately, not everyone who lost a home during the recession will feel the wrath of zombie debt collector, Dyck O’Neal. Former homeowners who went through a short sale, deed-in-lieu of foreclosure, or defended their foreclosure in court often got the lender to waive any deficiencies as part of a settlement.