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What is a deficiency judgment?

Bar Exam Prep Real Property Security Interests in Real Estate What is a deficiency judgment?
😀 Real Property • Security Interests in Real Estate PROP#228

Legal Definition

If the proceeds from a foreclosure sale are insufficient to satisfy the mortgage debt, the mortgagee can sue the mortgagor for the deficiency.

Plain English Explanation

If a mortgaged property does not sell for enough money to cover the debt owed to the lender, the lender can personally pursue the debtor to try to pick up the remaining amount.

Related Concepts

How do states treat a mortgage without a note? How do states treat a note without a mortgage? How is a mortgage's priority determined? How may a party be a holder in due course of a note? In lieu of foreclosure, what do many installment contracts prefer and how do courts address this alternative? Under which theories may a mortgagee take possession of a property and begin receiving rents before foreclosure? What are the 5 types of security interests in real estate? What are the benefits of the holder in due course status? What are the limitations of a junior interest? What are the methods of transferring a note? What interests does a foreclosure destroy? What is a due on sales clause? What is a foreclosure? What is an installment land contracts? What is a receivership? What is a redemption in equity? What is a statutory redemption? What is the distribution order of proceeds from a foreclosure? What is the result of a grantee assuming the mortgage? What liabilities are associated with a mortgaged property that is transferred to another party? What occurs in intermediate theory states? What occurs in lien theory states? What occurs in title theory states? What results from a party purchasing a foreclosed property subject to a senior interest? What security interests exist under a absolute deed? What security interests exist under a deed of trust? What security interests exist under a installment land contract? What security interests exist under a mortgage? What security interests exist under a sale-leaseback? Who may transfer their interest in a mortgage?
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