Deficiency judgments in Delaware are:
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Prohibited
Delaware does not prohibit deficiency judgments. While some states have anti-deficiency statutes that protect borrowers, Delaware maintains the lender's right to seek a deficiency judgment after foreclosure.
Allowed
Only for commercial property
Deficiency judgments in Delaware are not limited to commercial property. They apply to both residential and commercial properties, though the specific procedures may vary slightly.
Require separate lawsuit
While a lender may need to file a lawsuit to obtain a deficiency judgment, Delaware does not require a completely separate lawsuit as a prerequisite. The deficiency judgment can typically be obtained as part of the foreclosure process.
Why is this correct?
Delaware allows deficiency judgments after foreclosure. The state follows the fair value approach, meaning lenders can pursue borrowers for the difference between the foreclosure sale price and the outstanding loan balance, provided they can prove the property was sold at fair market value.
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