A Missouri property was sold at a non-judicial trustee's sale for $195,000. The outstanding deed of trust loan balance at the time of the sale was $220,000. The trustee's fees and publication costs totaled $3,000. After paying the trustee's fees and satisfying the deed of trust balance to the extent possible, what is the deficiency amount the lender may seek to recover from the borrower through a separate court action?
Correct Answer
C) $28,000
Step 1: Determine net proceeds available to pay the loan. Net proceeds = Sale price − Trustee's fees = $195,000 − $3,000 = $192,000. Step 2: Calculate the deficiency. Deficiency = Outstanding loan balance − Net proceeds applied to loan = $220,000 − $192,000 = $28,000. The lender may pursue a $28,000 deficiency judgment against the borrower through a separate court action under Missouri law, since Missouri does not have a broad anti-deficiency statute barring such actions after a trustee's sale.
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