What If I End Up With A Deficiency?

In a short sale, you sell your home for less than the total debt balance remaining on the mortgage. The lender agrees to accept the sale proceeds and release the lien on the property. The proceeds of the sale pay off a portion of the mortgage balance. Short sales are one way for borrowers can avoid foreclosure.

What is a deficiency?

Since the sale price is “short” of the full debt amount in a short sale, the difference between the total debt and the sale price is the “deficiency.”

Example. Say you are approved by your lender to sell your property for $200,000, but you owe $250,000 on the mortgage. The difference ($50,000) is the deficiency.

There is a Solution - Normally – if the property goes into foreclosure and there is a deficiency the bank has the right to come after you for the deficiency debt.  When we negotiate short sales we work on getting this deficiency debt waived so that you don’t have to worry.   Feel free to call us to learn more about this process.

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