Under what conditions could a lender seek a deficiency Judgement?

Deficiency Judgments After Judicial Foreclosures in California. Deficiency judgments are generally allowed after judicial foreclosures in California. But the lender can’t get one if the loan was: used to buy a dwelling that consists of one to four units that’s owner-occupied (called a “purchase money” loan)

Why does a court issue a deficiency judgment quizlet?

A deficiency judgment is a personal judgment against a borrower for the balance of a debt owed when the security for the loan is not sufficient to pay the debt.

What document contains language that gives the trustee the right to foreclose and sell the property in the event of default?

A power of sale is a clause written into a mortgage note authorizing the mortgagee to sell the property in the event of default in order to repay the mortgage debt. Power of sale is permitted in many states as part of a lender’s rights to seek a foreclosure.

What is a deficiency waivers?

What exactly does a deficiency waiver mean? A. A waiver of deficiency means that the mortgage company has agreed not to sue you for the unpaid balance that may remain after the home is sold (whether via a foreclosure sale, short sale or deed in lieu of foreclosure).

How does a mortgage company collect a deficiency judgment?

Mortgage creditors can garnish your wages, attach bank accounts, or file liens against your property in order to collect a deficiency judgment after foreclosure. Once a mortgage lender has obtained a deficiency judgment against you, it can then proceed to collect on that judgment.

Can a second lien holder collect a deficiency judgment?

If the mortgage creditor was a second lien holder in the foreclosure, it is more likely they will pursue collection efforts, especially if they received little or nothing from the foreclosure sale. This article explains the ways a mortgage lender can collect a deficiency judgment. (Learn more about deficiency judgments after foreclosure .)

What is an example of a deficiency judgment?

For example, if a house is worth only $150,000 but the homeowner owns $175,000 on it, then the mortgage lender is going to be at least $25,000 short (plus foreclosure fees and costs). A deficiency judgment allows the lender to come after the debtor homeowner to get that extra money — or the $25,000 in the above example.

Can a deficiency judgment be filed in Virginia?

A deficiency judgment is a court judgment that a mortgage lender gets against a homeowner after a foreclosure. Many states prohibit deficiency judgments, but Virginia, Maryland and the District of Columbia all allow them. Different states impose different limits on when a lender can pursue a deficiency judgment. But the basic premise is the same.

Can a lender seek a deficiency judgment against a debtor?

In some states, the lender can seek a personal judgment (called a “deficiency judgment”) against the debtor to recover the deficiency.

Can a bank get a deficiency judgment after a short sale?

A short sale is when you sell your home for less than the total debt balance remaining on your mortgage and the proceeds of the sale pay off a portion of the mortgage balance. In Missouri, a lender can get a deficiency judgment following a short sale.

How does a deficiency judgment work in California?

The deficiency judgment allows the lender to collect the debt through regular collection methods, like garnishing wages or levying a bank account. Read on to find out when your lender could get a deficiency judgment against you after a California foreclosure, and what happens to a deficiency in a short sale or a deed in lieu of foreclosure.