Deficiency Judgments

A deficiency judgment occurs when a homeowner goes through foreclosure and sells the property for less than the amount owed on the mortgage. For example, if you owe $300,000 but the home sells for only $250,000, the lender can seek a deficiency judgment for the remaining $50,000. This legal action allows the lender to pursue repayment from the borrower, potentially leading to garnished wages or bank account levies. In some states, laws may limit or prevent deficiency judgments, so it’s important for borrowers to understand their rights and options in foreclosure situations.