0
J. Deficiency Judgment
The foreclosure sale may not produce enough cash to pay the loan balance in full, after deducting expenses and accrued unpaid interest. In this case, the lender may be entitled to a personal judgment against the borrower for the unpaid balance. The lender is not required to seek a deficiency judgment and most commercial and residential lenders in Georgia do not seek deficiencies; however, it is allowed. Deficiency may also be obtained against any endorsers or guarantors of the note and against any owners of the mortgaged property who assumed the debt by written agreement. If any money remains from the foreclosure sale after paying the debt and other liens, such as the second mortgage or any mechanic's liens, expenses and interest, these proceeds are paid to the borrower.
If the lender seeks a deficiency judgment in Georgia, the lender must file for a deficiency within thirty (30) days of the foreclosure sale and follow the procedures outlined in OCGA § 44-14-161, or the claim for a deficiency is barred. The foreclosure sale must be confirmed and the deficiency judgment must be approved by a judge of the Superior Court in the county in which the sale occurred.
The above answer is correct, literally...but it overlooks one major item: GA laws respecting the note vs mortgage.
The "note" (which is the contractual loan obligation) is separate from the "mortgage" on the property. Both are legal instruments. Thus, a lender in Georgia could get around the requirements of judicial confirmation by first filing a lawsuit for breach of contract under the "note." This is strict and is easily determined (e.g., you miss one payment). If the note contains an acceleration clause (it will), then once you miss a payment the entire loan becomes due. The lender can easily obtain a judgment on that breach, as a result, for the full amount of the loan. This becomes a judgment lien that the debtor owes to the lender. The lender can then (separately) foreclose on the mortgage. Under the power of sale, the lender will sell the property at public auction (per the rules). If the foreclosure does not net the full amount of the mortgage, then the lender must seek a judicial confirmation in order to collect on the deficiency...but wait...what about the judgment lien from the lawsuit under the note? The lender DOES NOT need to confirm that... As such, the proceeds from the foreclosure can be applied to the judgment lien but the lender does not need to seek confirmation to collect on the deficiency under the judgment lien (lawsuit under the note).
For example: X takes out a loan from Y for 100K to buy a house. Y obtains a mortgage to secure and a signed note for 100K from X. Later, X misses a payment and Y sues under the note, obtaining a judgment for 100K (the value of the note/loan). After obtaining that judgment, Y forecloses on the property and sells it at public auction (per law). Since property values are down, Y is the only bidder. Y bids 1K for the property and is the highest bidder (even though the property is worth 70K now). Y does not seek to confirm the sale but instead applies the 1K to the 100K judgment lien and pursues X for 99K difference. Y will win under Georgia law. Thus, Y gets a 99K judgment against X (Y can pursue in court or sheriff's sale etc) and gets a 70K piece of land for 1K. In all, Y could potentially pull in 169K from the 100K loan because Y did not have to confirm the 1K foreclosure sale in order to collect under the judgment lien (from the note). X gets a 99K judgment against him/her, zero property, and some legal fees...ya think GA nees to change its laws?
What else can I help you with?
Can a judgment be placed on you due to a deficiency in a repossession?
Yes, the lender can file suit for the outstanding amount and if they receive a judgment they can execute the judgment in the manner in which the laws of the judgment debtor's state allow.
What are the deficiency judgment laws in Indiana?
If there is an agreement and an applicable waiting period is not waived, a deficiency judgment may be obtained on a mortgage in Indiana. This means that deficiency judgments in the state of Indiana are allowed by state statute if it is authorized by loan documents and if borrowers do not waive applicable waiting period.
Can a lender file Deficiency Judgment in Indiana?
Yes, a lender can file for a deficiency judgment in Indiana. The court has to approve the judgment in order to prosecute.
Can a bank garnish your pension in a deficiency judgment?
In general, pensions are typically protected from garnishment in the case of a deficiency judgment, meaning that a bank usually cannot seize pension funds to satisfy such a judgment. However, laws can vary by state, and there may be exceptions depending on the type of pension and the specific circumstances. It's important to consult legal counsel or a financial advisor for guidance based on your situation and local laws.
How do you know if you would get a deficiency judgment on your forclosure. Do they go after pension or social security?
Can there be a deficiency judgment on a mortgage forclosure in virginia?
What are Colorado's laws regarding deficiency judgments after a non-judicial foreclosure?
Colorado is a full recourse state. Creditors may pursue a debtor for a deficiency judgment for 20 years after the debt was incurred. Moving to another state could result in the creditor domesticating the deficiency judgment and then the new state's statute of collection limitations would apply.
What deficiency judgment laws in Maryland?
A homeowner who is foreclosed upon in the State of Maryland is exposed to the lender pursuing a deficiency judgment for the portion of the total debt not repaid from the proceeds of the foreclosure sale. The lender must pursue the in personum judgment (judgment against the person) within 3 years of the final ratification of the foreclosure.
What states have anti deficiency law on foreclosure?
Anti-deficiency laws are designed to protect borrowers from owing more than the value of their property after a foreclosure. States with notable anti-deficiency laws include California, Arizona, Nevada, and Washington, among others. These laws generally prevent lenders from pursuing a deficiency judgment against borrowers who default on their mortgage. However, the specifics can vary by state, so it's important to consult local laws for precise details.
Is Ohio a deficiency judgment state?
Yes, it is.
What is the process for a deficiency judgment in Michigan?
In Michigan, deficiency judgments are allowed after a sheriff sale of a property in foreclosure. If the mortgagee (usually the bank or investor that owns the mortgage) purchases the property at the public auction and sells for less than its fair market value, homeowners may be able to raise this as a defense to limit the size of the deficiency judgment. Michigan foreclosure laws are discussed at the following section of the Michigan Code: Mich. Comp. Laws sections 600.3101 to 600.3180, 600.3201 to 600.3280
If you filed bankruptcy and are now facing foreclosure can the bank get a personal deficiency against you?
Yes, if the state and loan documents allow for a deficiency judgment, the bank can sue for one after the home has been sold at the sheriff sale and there is a deficiency. If the homeowners are sued after the public auction and the bank gets a deficiency judgment, then bankruptcy can be used to discharge the judgment. However, bankruptcy can not be used in advance before a deficiency judgment or other debt even exists to preclude its possibility.
Is Oregon a real estate deficiency judgment state?
Yes, Oregon is a deficiency judgment state. This means that if a property is sold in a foreclosure and the sale price is less than the outstanding mortgage balance, the lender can seek a deficiency judgment against the borrower for the remaining amount. However, in Oregon, the borrower must be notified of the lender's intent to pursue a deficiency judgment, and there are specific rules governing the process.
