Once a mortgage lender gets a deficiency judgment against you, it can then proceed to collect on that judgment. If the mortgage creditor was a second lien holder in the foreclosure, it is more likely they will pursue collection efforts, especially if they received little or nothing from the foreclosure sale. This article explains the ways a mortgage lender can collect a deficiency judgment.
A deficiency judgment is a lawsuit filed by the lender for the amount the borrower owes. This would typically occur after a foreclosure or a short sale. For example, if the borrower owes the mortgage.
Deficiency judgment A deficiency judgment is an unsecured money judgment against a borrower whose mortgage foreclosure sale did not produce sufficient funds to pay the underlying promissory note, or loan, in full.
In the foreclosure context, judicial foreclosure where the creditor is seeking a deficiency judgment has traditionally fallen under. Chase Home Finance LLC, which held that every mortgage.
A mortgage foreclosure deficiency judgment entered on or after October 14, 1997, on property under agricultural use, as defined in s. 91.01 (2) , for at least 12 consecutive months during the preceding 36-month period shall be recorded as an agriculture judgment.
In general, a mortgage deficiency judgment is treated like any other general unsecured debt (such as medical bills) in bankruptcy. This means that whether you file for Chapter 7 bankruptcy or Chapter 13 bankruptcy, once you receive your discharge your personal liability for a mortgage deficiency will be wiped out.
When you take out a mortgage loan. To obtain a deficiency judgment against a foreclosed California homeowner, lienholders must apply to the court no later than three months after the foreclosure.
Even if the mortgage is covered by insurance, this does not mean that you can simply get away with not paying your mortgage and foreclosing on the loan. What will happen is that the mortgage insurance company or the lender will also try to recover some of what they paid by filing a deficiency judgment.
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Homeowners facing foreclosure now can protect themselves from future deficiency judgments by negotiating with their lenders. Hillard recommends that these owners hire attorneys who can, during foreclosure negotiations, encourage lenders to include provisions, as part of a settlement, stating that they won’t pursue deficiency judgments.