Tampa Foreclosure information about deficiency judgements continued…

August 26, 2011

Let’s take a closer look at what deficiency judgments are now.

So when you default on a loan and the lender repossesses your property, the value of the property may not pay off the loan.
For example, you might owe $100,000 on your home, but it only sells for $80,000. You’re $20,000 short.

Because the lender wants all of the money back, they may take further legal action against you. Legal action to collect the remaining amount is called a deficiency judgment.

A deficiency then, is the difference between the fair market value of the property and the amount received, providing the amount received is less than the amount owed.

Whether the bank can pursue a deficiency judgment after a foreclosure or short sale depends in part on whether a promissory note makes the seller personally liable for the debt. Some states allow for personal liability.

Learn more about all of this from Chris and his guest in

this video.

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