Articles Posted in Foreclosure

When a mortgage lender forecloses on a home, the total debt owed by the borrower to the lender often exceeds the foreclosure sale price. The difference between the sales price and the total debt of the borrower is called a deficiency.

In many states, a mortgage lender can receive a personal judgment against the borrower to recover the deficiency owed. Once the lender receives a judgment on a deficiency, the lender can collect the amount from the borrower by levying the borrower’s bank account or garnishing the borrower’s wages.

In some states the mortgage lender can foreclose without going to court. In Florida, foreclosures are judicial, which means the lender must petition for foreclosure through state court. Lenders in Florida may obtain a deficiency judgment as part of the foreclosure action if the borrower was personally served with the foreclosure complaint. The lender may also file a separate lawsuit against the borrower for a deficiency, unless the court in the foreclosure action has granted or denied a claim for a deficiency judgment.