How Do You Avoid A Deficiency Judgment?
A deficiency judgment occurs when the lenders foreclose on a home and the proceeds are not sufficient to pay off all of the loans. The amount still owed is the deficiency. Lenders then file a lien called a deficiency judgment which will continue to obligate the borrowers to pay more money even after the foreclosure has been completed. To stop a deficiency judgment, you need to take actions to avoid a foreclosure or preserve your rights if foreclosure is inevitable. In just a few steps, you can avoid paying back a deficiency judgment no matter your circumstances. Ask your lender for a loan modification. Programs such as Making Home Affordable and other loan modification plans sponsored by the government could help you stay in your home. They will often lower the interest rate or extend the amortization schedule of your loan up to 40 years. By doing this, you can lower your monthly payments, stay in your own home, and avoid having a deficiency judgment which will damage your credit sever
