What is a deficiency judgment in a foreclosure?

A deficiency judgment is a court ruling which allows the lender to seek the balance of the debt from the borrower if the property that was foreclosed on does not cover the entire loan amount. In Florida, deficiency judgments may be sought after an auction or sale of the property has taken place and the lenders have received a return that is not enough to cover what is owed on the loan. Even if the foreclosure sale results in a return of the full loan balance or more, the lender still has the right to seek a deficiency judgment if the borrower failed to maintain payments and fees on the loan. It is important to note that deficiency judgments are very rarely sought after in Florida foreclosure law as lenders often determine that the cost of pursuing a deficiency judgment outweighs the potential benefit of the amount that could be collected. Deficiency judgments are legally binding court orders which must be paid in full by the borrower, and the lender has the right to pursue alternative methods of collection such as wage garnishment and asset seizure should the borrower be unable to make full payment. To avoid a deficiency judgment, it is important to keep up with loan payments and fees, or to contact the lender if a payment is missed in order to work out an alternate arrangement.

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What is a deficiency judgment in a foreclosure?

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