What is a deficiency judgment?

A deficiency judgment is a court order in Massachusetts foreclosure law that requires the homeowner who lost their home in a foreclosure sale to pay the remaining balance on their mortgage. This happens if the sale of the home did not cover the entire balance of the mortgage. For example, if a homeowner has a mortgage of $200,000 and the property is only sold for $150,000, the homeowner still owes the bank the other $50,000. A deficiency judgment allows the bank to pursue the homeowner for that $50,000. The bank can then go to court and request that a judge issue the deficiency judgment, which orders the homeowner to pay the remaining balance. The homeowner has a few options in response to a deficiency judgment. They can try to negotiate with the bank to reduce the amount they owe, or they can try to pay off the balance in full, or they can try to file for bankruptcy and have the debt discharged. If the homeowner fails to take any action, the bank may be able to pursue additional action such as wage garnishment or putting a lien on other property. It is important for homeowners to take action to protect themselves if they receive a deficiency judgment.

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What is a deficiency judgment?

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