Ronald defaulted on his home mortgage payments. The lender obtained a court order to foreclose on the property. At the foreclosure sale, Ronald's house sold for $29,000 and the unpaid balance of his loan is $40,000. What must the lender do to recover the $11,000 Ronald still owes?

Question

Keyla Cantrell

Business

5 June, 05:13

Ronald defaulted on his home mortgage payments. The lender obtained a court order to foreclose on the property. At the foreclosure sale, Ronald's house sold for $29,000 and the unpaid balance of his loan is $40,000. What must the lender do to recover the $11,000 Ronald still owes?

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Answers (1)

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Halle · Answer 1

If the state allows it, the lender should seek a deficiency judgment.

Explanation:

First of all, 15 states don't allow deficiency judgments: Alaska, Arizona, California, Connecticut, Hawaii, Iowa, Minnesota, Montana, Nevada, New Mexico, North Carolina, North Dakota, Oregon, Washington, and Wisconsin.

A deficiency judgment is a lawsuit that a lender seeks in order to recover any amount of a loan that is not covered through a foreclosure sale. In this case, the lender will try to recover the $11,000 that Ronald still owes through a deficiency judgment.