Deficiency judgment
Legal action sought by a lender who wants to recover any losses on a foreclosure
If you default on a mortgage, the lender can not only sell your property to get their money back, but they can also sue you if the money from the sale isn’t enough to cover the loan. For example, if you owe a lender $100,000, but the lender only gets $90,000 in a foreclosure sale, they can take you to court for the remaining $10,000. If the lender wins, they can attack your assets, income, credit and peace of mind until you pay this amount. If you have Private mortgage insurance, a lender can use this money to offset any losses instead of getting a deficiency judgment. Keep in mind that only some states give the lender the right to a deficiency judgment.