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 Wyoming, 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. This is known as a deficiency balance or mortgage deficiency. Wyoming statutes allow lenders to pursue deficiency judgments following both judicial and non-judicial foreclosures. However, the pursuit of a deficiency judgment must be initiated within a certain time frame after the foreclosure sale, typically within 90 days. The amount of the deficiency judgment may be limited to the difference between the mortgage debt and the fair market value of the property at the time of the sale, rather than the sale price. Borrowers should be aware that if the lender waives the right to a deficiency judgment at the time of the foreclosure, they cannot later seek to collect the deficiency. It is important for borrowers facing foreclosure in Wyoming to understand their rights and obligations under state law and to consult with an attorney for guidance specific to their situation.