A Kentucky homeowner's property sold at a sheriff's sale for $180,000. The outstanding mortgage balance was $210,000, and the lender incurred $8,000 in court costs and attorney's fees during the foreclosure. After the sale proceeds are applied, what legal remedy may the lender pursue for the remaining unpaid amount?
Correct Answer
A) The lender may file for a deficiency judgment against the borrower for the remaining $38,000
After a Kentucky sheriff's sale, if the proceeds are insufficient to cover the full debt (including principal, interest, court costs, and attorney's fees), the lender may seek a deficiency judgment against the borrower for the shortfall. Here: outstanding balance $210,000 + costs $8,000 = $218,000 total owed; sale proceeds = $180,000; deficiency = $218,000 - $180,000 = $38,000. The lender can obtain a personal judgment against the borrower for this $38,000 deficiency under KRS Chapter 426.
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