Anti-Deficiency Laws | Practical Law

Anti-Deficiency Laws | Practical Law

Anti-Deficiency Laws

Anti-Deficiency Laws

Practical Law Glossary Item 9-512-1889 (Approx. 2 pages)

Glossary

Anti-Deficiency Laws

State laws that prohibit or limit a residential mortgage lender's right to recover from a borrower the discrepancy between:
  • The unpaid mortgage balance.
  • Either:
    • the foreclosure sale price; or
    • the fair market value of the property.
Most anti-deficiency laws only apply to a borrower's primary residence.
When a single debt is secured by multiple properties in multiple states, issues may arise relating to the procedures required for and the lender's right to obtain a deficiency judgement in each jurisdiction if the properties securing the debt are being sold separately for less than the full amount of the debt.