What is a deficiency judgment in a foreclosure?

In Massachusetts, a deficiency judgment is a financial decision made by the court in a foreclosure that holds the borrower responsible for any remaining debt owed after a foreclosure sale of the property. This means that if the foreclosure sale does not cover the entire loan balance, the lender can sue the borrower for the remaining amount, plus any additional fees they have incurred. The deficiency judgment can be much larger than the original loan because various legal costs can be added to the amount owed after the foreclosure auction. This includes court costs, lawyers’ fees, and any expenses incurred by the lender in trying to collect the debt from the borrower. The deficiency judgment is one way that a lender can recoup their losses in the event of a foreclosure. However, borrowers should be aware that the Massachusetts foreclosure law does give them certain rights, such as the right to challenge a deficiency judgment, or to seek a payment plan with the lender.

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