What is Deficiency Judgment?
A deficiency judgment is a court ruling that makes a borrower personally responsible for the remaining balance when a foreclosure or short sale brings in less than what was owed. Many California home loans are protected from this by “anti-deficiency” laws, but protection depends on the loan type and situation. It is a key reason to get professional advice before a distressed sale.
Example: A home sells at foreclosure for $50,000 less than the debt. Whether the lender can pursue a deficiency judgment for that gap depends on California’s anti-deficiency rules and how the loan was used.