Helping 20 Million Americans a Year for 20 Years. FREE!
Find the Right Lawyer for Your Legal Issue!

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential

Call us today for a free consultation (855) 466-5776

Anti-Deficiency Protection for Homeowners in Foreclosure

UPDATED: June 19, 2018

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident law decisions. Finding trusted and reliable legal advice should be easy. This doesn't influence our content. Our opinions are our own.

If a borrower/purchaser fails to make his mortgage payment and the property is foreclosed (title is taken by the lender through legal action), and the property is sold to pay the mortgage, a deficiency between the sale price and the outstanding balance of the mortgage could occur. Some states have anti-deficiency laws to protect these purchasers who default on their purchase money loans secured by their primary residences. 

Impact of Anti-Deficiency Legislation

Under anti-deficiency laws, if the mortgage loan is a purchase money mortgage for the purchase of a dwelling occupied by the borrower, this purchaser will not be held responsible for any deficiency. The lender can only recover the property and the proceeds of a subsequent sale. The purchaser is not responsible for any deficit between the sale proceeds and the outstanding loan balance. The lender cannot take further action against the purchaser.

Anti-deficiency laws typically provide no protection for other than purchase money mortgages (such as a second mortgage obtained after the original acquisition), and there is no protection when the property is not used as the primary residence of the purchaser.

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential

Call us today for a free consultation (855) 466-5776