Deficiency Judgment
A court judgment against a borrower for the loan balance still owed after a foreclosure sale brings less than the debt.
Quick flashcard
What does Deficiency Judgment mean on the Texas real estate exam?
Answer: A court judgment against a borrower for the loan balance still owed after a foreclosure sale brings less than the debt.
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Deficiency Judgment definition
When a foreclosure sale produces less money than the borrower owes, the shortfall is a deficiency. A deficiency judgment is a court order making the borrower personally liable for that remaining balance.
Texas allows a deficiency judgment after a non-judicial foreclosure sale, but the borrower may ask the court to determine the property's fair market value and offset the deficiency by that value. A separate suit must be brought within the statutory deadline.
Source basis
Definition checked against the official sources below on .
On the exam
Exam trap
Tested in
Financing & Settlement (7 of 80 National)
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