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Real property

deficiency balance on foreclosure

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 Vermont, 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 amount. Vermont law allows for deficiency judgments following both judicial and non-judicial foreclosures. However, the process and the borrower's liability can be influenced by factors such as the type of foreclosure process used, the terms of the mortgage contract, and any applicable redemption periods. It is important for borrowers in Vermont to understand that they may still owe money to the lender even after the property has been sold at foreclosure, and the lender has the right to pursue legal action to recover the deficiency balance. Borrowers facing foreclosure should consult with an attorney to understand their rights and obligations under Vermont law.

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Real property

deficiency balance on foreclosure

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Vermont State Code

Vermont State Code

Real property

deficiency balance on foreclosure

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