Deficiency Judgment

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Deficiency Judgment

An assessment of personal liability against a mortgagor, a person who pledges title to property to secure a debt, for the unpaid balance of the mortgage debt when the proceeds of a foreclosure sale are insufficient to satisfy the debt.

Legislation enacted during the Depression still restricts the availability of deficiency judgments in several states. In some jurisdictions, deficiency judgments are proscribed in certain situations, while in other states, they are limited to the amount by which the debt exceeds the fair market value of the property. Waiver, the intentional relinquishment of a known right, of the benefits conferred by antideficiency legislation contravenes public policy and is ineffective.

deficiency judgment

n. a judgment for an amount not covered by the value of security put up for a loan or installment payments. In most states the party owed money can only get a deficiency judgment if he/she chooses to file a suit for judicial foreclosure instead of just foreclosing on real property. Some states allow a deficiency action after foreclosure on the mortgage or deed of trust. The right to a deficiency judgment is often written into a lease or installment contract on a vehicle. There is a danger that the sale of a repossessed vehicle will be at a wholesale price or to a friend at a sheriff's sale or auction, leaving the debtor holding the bag for the difference between the sale price and remainder due on the lease or contract. (See: foreclosure, judicial foreclosure)

References in periodicals archive ?
No deficiency judgment may be rendered against the County for breach of a contractual obligation under the Installment Financing Agreement, and the taxing power of the County will not be pledged to secure repayment thereunder.
Whitefish then requested a deficiency judgment against Defendants for $745,365.
With that said, let's interpret the Utah Trust Deed Act and highlight some practical solutions for lenders to avoid forfeiting their right to recover a deficiency judgment.
We're not filing a deficiency judgment if someone lost their job and couldn't make the payment.
Maryland's real property code was amended to limit post-foreclosure remedies to filing for a deficiency judgment if the property was an owner-occupied residence.
The lender is seeking to take possession of the property and pursue a deficiency judgment against Mitzi Osborne, who is living in a friend's house in the gated Hickory Creek neighborhood, we're told.
Generally, plaintiffs move for a deficiency judgment simultaneously with moving to confirm the sale, but the deficiency judgment motion does not enjoy the same flexibility as the confirmation motion.
After reviewing their situation, the tax adviser suggested that the couple file Chapter 13 bankruptcy to shield them from the $33,000 deficiency judgment.
However, what if that obligated former spouse fails to pay the mortgage, the home is foreclosed, and a deficiency judgment is entered?
The statute does not affect the validity of the sale or the right of a mortgagee-purchaser to title in fee, or his right to obtain a deficiency judgment, if the mortgagor fails to redeem within the prescribed period.
This process is required if the lender wants to obtain a deficiency judgment to hold the borrower liable for the unpaid balance of the debt.
A lender cannot obtain a deficiency judgment through a non-judicial foreclosure.

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