Marc Cormier - WHERE DO I TURN? A COMPASSIONATE GUIDE TO AVOIDING FORECLOSURE

DEFICIENCY JUDGMENTS

Following the foreclosure sale, whether the property is sold as an REO or to a new individual owner, the courts may grant a deficiency order against you if the sale price fails to cover your mortgage balance. For example, if your mortgage balance was $370,000 and the house sold for only $350,0000, the lender could ask the court’s authorization to collect the $20,000 difference from you.

POINTS TO REMEMBER:

• If you are in default of your mortgage, your lender — or the lender’s trustee — will schedule your house to be sold to the highest bidder at a public auction. • If a third-party bidder does not purchase the property, its ownership reverts to the bank or other lending institution, who will most likely attempt to sell it in a liquidation auction or by other means. • You will ultimately be required to vacate the house. If you persist in staying there, you and your possessions will be forcibly removed. • Following the foreclosure auction, you might be held responsible for a deficiency judgment, which requires you to pay the difference if the sale does not cover your mortgage balance.