What is a deficiency action?

What is a deficiency action?

Utah remains one of the states that allow banks to sue a home owner after a foreclosure for any amount still owing on the loan. This type of lawsuit is euphemistically called a “deficiency action.”

Why would a lender waive a deficiency claim?

The mortgage company would grant a deficiency waiver if they don’t intend to collect. Some mortgage companies do not collect on deficiencies. The mortgage company might also waive the deficiency in order to compel the homeowner to take or refrain from taking an action.

Do I owe money after a short sale?

In California, you can only do so after a short sale, but remain liable for the debts after a foreclosure sale. Thus, deficiency judgments, or these debts you may still owe after your home was sold, can usually be discharged in bankruptcy.

What does deficiency waiver mean?

A. A waiver of deficiency means that the mortgage company has agreed not to sue you for the unpaid balance that may remain after the home is sold (whether via a foreclosure sale, short sale or deed in lieu of foreclosure).

What is a deficiency in a foreclosure sale?

When a lender forecloses, the total debt the borrowers owe to the lender sometimes exceeds the foreclosure sale price. The difference between the sale price and the total debt is called a deficiency. Example. Say the total debt owed is $400,000, but the home sells for $350,000 at the foreclosure sale. The deficiency is $50,000.

Do you have to pay deficiency on foreclosure in Texas?

With most Texas foreclosures, you might owe your mortgage lender money after the foreclosure sale if the sale amount is not enough to cover your total debt. But if the foreclosure is on a home equity loan, you’re not on the hook for a deficiency (when the mortgage balance exceeds the sale price).

Can you get a deficiency judgment after a foreclosure in Arizona?

There is no Arizona law that says a lender cannot get a deficiency judgment following a deed in lieu of foreclosure. To avoid a deficiency judgment with a deed in lieu of foreclosure, the agreement must expressly state that the transaction is in full satisfaction of the debt.

Can a bank get a deficiency judgment in Texas?

If your home in Texas sells at a foreclosure sale for less than you owe on your mortgage loan, you might be on the hook to pay more money. That’s because, in most cases, Texas law allows the foreclosing bank to get a deficiency judgment for the difference between the sale price and the borrower’s total debt.

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