Distressed Owners
Will the Bank Come After Me for the Deficiency After a Short Sale or Foreclosure in Florida?
By Yogi Ganeshram · 10/31/2026
It can, but not always, and you have more control in a short sale than in a foreclosure. A deficiency is the gap between what you owe and what the home brings. Whether the lender can collect it depends on how the case ends.
What a deficiency is
Say you owe $320,000 and the home sells for $270,000. The lender is short $50,000, plus fees. That shortfall is the deficiency. This example is illustrative.
In a short sale
The approval letter should say what happens to the shortfall. There are three possibilities:
- Waived. The lender forgives the balance. This is what you want, in writing.
- Settled. You agree to pay part of it.
- Preserved. The lender keeps the right to pursue the balance.
Read the letter before you close. If it does not say the deficiency is waived, do not assume it is. Have a Florida attorney review it.
In a foreclosure
In some cases the lender can ask the court for a deficiency judgment. Time limits apply, and a judgment can lead to collection efforts. An attorney can tell you what applies to your case.
Taxes
Forgiven debt can sometimes count as taxable income. Ask a CPA whether an exclusion applies to you under current law.
What to do
- Get the lender's approval or settlement terms in writing.
- Have a Florida attorney review any waiver or release.
- Keep copies of everything.
I have closed 400+ short sales with deficiency waivers secured. The waiver has to be in writing before you close.
What to do this week
Send me your lender's name and your payoff, and I will tell you what to ask for in the approval.
Common questions
About Yogi
Yogi Ganeshram, eXp Realty licensed REALTOR, 23+ years, 500+ homes sold, 200+ flips, 400+ short sales with deficiency waivers secured
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This article is general education, not legal or tax advice. Talk to a licensed Florida attorney or tax professional about your situation.
Yoganand Ganeshram PA · Licensed Florida Real Estate Agent — SL 3131685 · eXp Realty in Florida · Equal Housing Opportunity.