What is a deficiency judgment?

A deficiency judgment is a court order issued by a judge as part of a foreclosure process in Texas. Under Texas law, when a homeowner falls behind on their mortgage payments, the bank or lender has the right to foreclose on the property. This means the lender takes ownership of the property and is able to sell the home to recover any outstanding debt. If the amount obtained from the sale of the property is less than the total amount owed, then the court can issue a deficiency judgment. This is an order requiring the homeowner to pay the remaining balance. Failure to pay the deficiency can result in additional legal action, such as wage garnishments or property liens. A deficiency judgment can also remain on one’s credit report for up to seven years and have a negative impact on their credit score. Therefore, it is important to contact a lawyer or housing counselor if you are faced with a foreclosure in Texas.

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What is a deficiency judgment?

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