A Louisiana homeowner defaults on a mortgage with an outstanding principal balance of $180,000. The lender obtains a judgment and proceeds with a judicial foreclosure sale. The property sells at the sheriff's sale for $150,000. Court costs and attorney fees total $6,000. What is the deficiency balance the lender may seek to recover from the borrower after applying the sale proceeds?
Correct Answer
A) $36,000
In Louisiana, foreclosure is a judicial process governed by the Louisiana Code of Civil Procedure. The lender is entitled to a deficiency judgment for the amount still owed after the sheriff's sale proceeds are applied. The deficiency is calculated as: Outstanding balance ($180,000) + costs and fees ($6,000) − sheriff's sale proceeds ($150,000) = $36,000. Louisiana law allows the lender to pursue a deficiency judgment for this remaining amount after a judicial foreclosure sale.
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