What is a deficiency judgment in a foreclosure?

A deficiency judgment in a foreclosure is a court-ordered payment that is issued in the state of Washington when a foreclosed property is sold at auction for less than the amount owed by the borrower. This means that the lender, who initiated the foreclosure, is not able to recover the full amount of the loan. When this happens, the court may order the borrower to pay the difference in what is known as a deficiency judgment. For example, if the borrower owns a $400,000 home and is facing foreclosure, but the property is auctioned off for $300,000. The lender is then only able to recover $300,000 of the loan, leaving a deficiency of $100,000. In this situation, the court may issue a deficiency judgment for the remaining $100,000. The borrower must then pay the entire deficiency judgment or risk facing other consequences. Those consequences may include wage garnishment, asset seizure, or even jail time in extreme cases. The borrower should always seek legal assistance to understand their rights and options to avoid or reduce a deficiency judgment.

Related FAQs

How can I find out if I am a victim of wrongful foreclosure?
Can a foreclosure sale be reversed?
What is a deficiency judgment in a foreclosure?
Can I file an objection to a foreclosure sale?
What are the differences between a foreclosure and a short sale?
What is an upset bid in a foreclosure?
What is a deed-in-lieu of foreclosure?
What are the foreclosure laws in my state?
How can I protect myself from foreclosure?
Can I still make payments on my loan after a foreclosure sale?

What is a deficiency judgment in a foreclosure?

Related FAQs

Related Blog Posts