What is a deficiency judgment in a foreclosure?

A deficiency judgment in a foreclosure is a legal procedure that a lender in California may pursue to collect any remaining debt after a foreclosure sale. When a borrower fails to pay their mortgage and the property is sold in foreclosure, the amount received from the foreclosure sale may not cover the remaining balance of the loan. In this case, the lender can pursue a deficiency judgment to cover the remaining balance. In California, the lender must send the borrower a notice of the right to request a hearing on the amount of deficiency within 30 days of the foreclosure sale. This hearing is requested in writing and the lender must serve the borrower with the notice of the foreclosure sale and the amount of the deficiency. If the borrower can prove that the foreclosure proceeds were less than the amount of the debt, the deficiency amount may be reduced. If the borrower does not respond to the deficiency judgment notice within 30 days, the lender can pursue a court action to collect the remainder of the debt. The court will then issue an order for the deficiency amount plus any associated court fees. In some cases, the court may rule that the lender may not pursue a deficiency judgment. It is important that borrowers understand their rights when facing foreclosure in California. Borrowers are always urged to consult with experienced legal counsel to determine their best course of action.

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What is a deficiency judgment in a foreclosure?

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