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.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.

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)

Copyright © 1981-2005 by Gerald N. Hill and Kathleen T. Hill. All Right reserved.
References in periodicals archive ?
Allowing the state judiciary to enter a deficiency judgment in a foreclosure proceeding does not undermine any function of bankruptcy law.
Webster Bank (Bank) foreclosed a mortgage held by defendants and sought a deficiency judgment against the defendants because the subject property appraised at $725,000 against the defendant's $1,425,498 debt.
Lastly, if the lender chooses, a deficiency judgment against a borrower for any remaining balance would still be available.
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.
Many property managers may not be aware that the foreclosure applicant still could be liable to the lender for additional monies called a "deficiency judgment." That is the difference between what the home sold for at foreclosure and the remaining balance on the loan.
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.
This time, the bank told them they were about to be sued for $33,569--the difference between what they owed on their mortgage at the time of foreclosure and what the bank was able to sell their house for--as part of a "deficiency judgment." Foreclosees should brace themselves for legal repercussions such as this.
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.

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