What is a deficiency judgment?

A deficiency judgment is a legal ruling that a homeowner in Washington must pay the difference between what was owed on the mortgage debt and what was obtained from the foreclosure sale proceeds. This amount is determined after a successful foreclosure process has taken place. When a homeowner defaults on their mortgage payments, the lender can begin the foreclosure process in Washington. The lender can either go through the court system or use the non-judicial process. Through either process, the lender can repossess the property, usually with the help of a local sheriff. The lender then auctions off the property to the highest bidder. The proceeds from the auction are then used to pay off the mortgage debt. If the amount obtained from the foreclosure sale is less than what was owed on the mortgage, the lender can file a deficiency judgment. This means that the homeowner still owes the remaining balance despite the foreclosure sale. This amount is what is known as a deficiency judgment. The court can then order the homeowner to pay the remaining balance. If the homeowner continues to fail to make payments, then the lender can take additional legal action to collect the remaining balance.

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