What is a deficiency judgment?

A deficiency judgment is a court order which allows the lender of a mortgage in California to collect the balance of money owed to them if the home or property goes through foreclosure and the home or property is sold for less than the outstanding loan balance. When this occurs, the lender may seek a deficiency judgment against the former homeowner. This court order allows the lender to collect the difference between what was owed on the mortgage, and what was recovered in the sale of the foreclosed home. This difference, known as the “deficiency balance”, is typically collected by the lender through wage garnishment, bank levies, or an in-house payment plan. In California, the lender may not seek a deficiency judgment on an owner-occupied home where foreclosure takes place. Deficiency judgments are an important part of foreclosure law in California and should not be ignored, as failure to pay can result in legal action taken against the former homeowner. When facing a deficiency judgment, it is important to seek help from a legal professional to ensure the best outcome. A lawyer who specializes in California foreclosure law can help the former homeowner understand their rights and navigate the court process. Additionally, they can help identify any possible legal options that are available to the former homeowner and provide them with the best advice available.

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What is a deficiency judgment?

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