Robert defaults on his Mississippi deed of trust. The trustee completes the non-judicial foreclosure and conducts the public auction. The sale proceeds are insufficient to cover the full outstanding loan balance. What term describes the remaining unpaid debt that the lender may seek to recover from Robert after the foreclosure sale?
Correct Answer
B) Deficiency judgment
When a foreclosure sale produces proceeds that are less than the outstanding loan balance, the remaining unpaid amount is called a deficiency. The lender may pursue a deficiency judgment against the borrower (Robert) in court to recover this shortfall. This concept applies in Mississippi's deed of trust non-judicial foreclosure context under Miss. Code Ann. §89-7-1 et seq., where the lender retains the right to seek a deficiency judgment after the sale.
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