Can a lender pursue a deficiency judgment in a foreclosure?

In Washington, lenders are permitted to pursue deficiency judgments in foreclosure cases, though there are some caveats. A deficiency judgment is a court order that holds the borrower financially accountable for the remaining balance of the mortgage when the proceeds from the foreclosure sale falls short. In a non-judicial foreclosure, the lender must comply with the preforeclosure requirements and wait the foreclosure process before they are able to file a deficiency judgment. This process significantly limits their ability to pursue a deficiency judgment and instead allow them to recover their losses through the foreclosure sale. For judicial foreclosures, the lender may obtain a deficiency judgment immediately following the foreclosure sale. The lender must file a motion seeking a deficiency judgment with the court and provide proof that the sale netted less than the amount they are owed. In both cases, the lender cannot pursue a deficiency judgment if it would cause an unreasonable financial burden to the borrower. If a deficiency judgment is granted, the borrower must pay the remaining balance of the mortgage in the form of an installment plan or lump sum payment.

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