deficiency judgment

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deficiency judgment

A lawsuit and judgment against a debtor for the remaining balance due on a promissory note after giving credit for any repossessed or foreclosed collateral.

Example:  Sarah has a mortgage for $200,000 on her home. She defaults on her loan, and the bank forecloses. The bank sells the home at a foreclosure auction to a third party who bids only $160,000 because the home has been allowed to deteriorate and needs many repairs. Sarah still owes the bank $40,000 unless she lives in a state that does not allow deficiencies on home loans. The bank may sue Sarah and obtain a judgment for $40,000, called a deficiency judgment.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
It is too late to hold Anderson liable for a deficiency judgment. The Bank must be content with what it can collect from Kaiser.
This deficiency judgment procedure presumes the amount of the debt as established by the foreclosure judgment and merely provides for a hearing on the value of the property....
If a lender desires to obtain a deficiency judgment, then he or she should make a reasonable effort to value the real property and then make a bid that is commensurate with that value.
Florida courts apparently will not be deluged, with a couple notable exceptions, with hundreds of thousands of actions from banks seeking deficiency judgments from older foreclosure cases.
Lopa, the Second Department held that the equitable relief doctrine does not prevent a plaintiff in a foreclosure complaint from also requesting a deficiency judgment.
After reviewing their situation, the tax adviser suggested that the couple file Chapter 13 bankruptcy to shield them from the $33,000 deficiency judgment.
Husband failed to pay, the house went into foreclosure, and a deficiency judgment was entered against the wife.
The statute also prevented lenders from bidding at a judicial sale or obtaining a deficiency judgment. (63)
Lenders using the nonjudicial foreclosure process are prohibited from seeking a deficiency judgment against the borrower (Sec.
A lender cannot obtain a deficiency judgment through a non-judicial foreclosure.
Several states imposed new limits on the length of time that a lender could seek a deficiency judgment after a foreclosure sale.
The deficiency judgment resulting from the exercise of the default option is examined in Jones [1993].

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