Founded in 1977, Codilis & Associates is a premier law firm that represents clients in the mortgage lending industry in matters of real estate law. Codilis and Associates works with its clients around foreclosure matters such as applying for deficiency judgments.
A deficiency judgment gives lenders a way to pay off outstanding debt owed by a borrower following a foreclosure sale. When a mortgage borrower goes into default, the lender, after instituting a judicial foreclosure process, may subject the property to a public auction. If the lender sells the property at a price lower than the outstanding debt plus interest and fees, the balance is the deficiency. In such a case, the lender can ask the court for a deficiency judgment against the borrower to recover the amount.
A deficiency judgment granted by a court can either be in personam or in rem. An in personam deficiency judgment grants the lender rights to collect the deficiency from the borrower personally. The lender can do so through actions such as levying the borrower’s bank account or garnishing wages.
An in rem judgment, on the other hand, is a judgment against the property itself. It becomes applicable when a borrower exercises his or her redemption rights in foreclosure. If the borrower pays off the outstanding debt to stop foreclosure and reclaim the property, the lender can apply for a deficiency judgment in rem that gives it lien over the property until the entire debt is cleared.
A deficiency judgment gives lenders a way to pay off outstanding debt owed by a borrower following a foreclosure sale. When a mortgage borrower goes into default, the lender, after instituting a judicial foreclosure process, may subject the property to a public auction. If the lender sells the property at a price lower than the outstanding debt plus interest and fees, the balance is the deficiency. In such a case, the lender can ask the court for a deficiency judgment against the borrower to recover the amount.
A deficiency judgment granted by a court can either be in personam or in rem. An in personam deficiency judgment grants the lender rights to collect the deficiency from the borrower personally. The lender can do so through actions such as levying the borrower’s bank account or garnishing wages.
An in rem judgment, on the other hand, is a judgment against the property itself. It becomes applicable when a borrower exercises his or her redemption rights in foreclosure. If the borrower pays off the outstanding debt to stop foreclosure and reclaim the property, the lender can apply for a deficiency judgment in rem that gives it lien over the property until the entire debt is cleared.
