What is a deficiency bid?
AA deficiency bid occurs when the foreclosing lender submits a written bid for an amount less than owed. The foreclosing lender may elect to sue the homeowner, or anyone else who signed the original promissory note (loan papers), for the amount of the deficiency (the amount owed minus the amount of the bid). Bidding at the Public Trustee sale on properties that have deficiency bids begins at one dollar over the lender bid amount. In most cases lenders file deficiency bids because the adjusted fair market value of the property is less than the amount owed to them.
