FinancingMortgage_instrumentsMEDIUM
A foreclosed property sells for less than the unpaid debt and allowable foreclosure expenses. In a jurisdiction that permits personal recovery after the sale, what is the lender seeking when it sues the borrower for the remaining balance?
Correct Answer
C) A deficiency judgment for the unpaid balance
A deficiency judgment is a personal money judgment for the amount still owed after the collateral has been sold and the sale proceeds have been applied. It is the lender's attempt to recover the shortfall that remains after foreclosure.
Answer Options
A
A defeasance release of the lienB
A notice of reconveyance to the trusteeC
A deficiency judgment for the unpaid balanceD
An equity redemption credit to the buyerWhy This Is the Correct Answer
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Why the Other Options Are Wrong
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Deep Analysis of This Financing Question
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Background Knowledge for Financing
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Real World Application in Financing
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Related Topics & Key Terms
Key Terms:
deficiency_judgmentforeclosurepersonal_liabilityloan_default
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