A deficiency balance on foreclosure—also known as a mortgage deficiency or deficiency balance—occurs when a home or property is foreclosed on and the sale proceeds are not sufficient to pay off the mortgage. The remaining balance owed on the mortgage is a deficiency balance or mortgage deficiency.

Laws vary from state to state and a state’s laws and the terms of the mortgage may determine whether the mortgage lender (bank or mortgagee) will pursue a mortgagor who defaulted on a mortgage for any deficiency balance.

In Oklahoma, if a property is foreclosed upon and the sale does not generate enough funds to cover the outstanding mortgage balance, the lender may seek a deficiency judgment against the borrower for the remaining balance, known as a deficiency balance. Oklahoma allows for deficiency judgments following a foreclosure, but the process and rights of both the lender and borrower are governed by specific state statutes. Under Oklahoma law, the lender must file a separate lawsuit to obtain a deficiency judgment within 90 days after the foreclosure sale. The amount of the deficiency judgment may be limited to the difference between the total debt owed and the fair market value of the property at the time of the sale, rather than the actual sale price. Borrowers have the right to contest the deficiency amount and present evidence regarding the property's value. It's important for borrowers facing foreclosure in Oklahoma to understand their rights and obligations under state law and to consult with an attorney for guidance specific to their situation.