How does the right to deficiency develop and how are such claims prosecuted?
A deficiency judgment is a personal money judgment that can be entered against the mortgagors as well as guarantors based on any deficiency between judgment amount and the value of the property as of the date of the sale. As a general rule, where the winning bid at a foreclosure sale is not sufficient to pay the entire judgment, the mortgagee is entitled to a deficiency judgment equal to the total judgment amount less the amount bid. However, if the mortgagee is the high bidder, the deficiency is determined by subtracting from the judgment amount the greater of the bid amount or the fair market value of the property. Thus, when a mortgagee purchases foreclosed property by bidding the full amount in the final judgment of foreclosure, the mortgagee’s judgment is satisfied in full and a deficiency judgment is not possible. If the mortgagee does not bid the full amount of the final judgment, or if the mortgagee does not acquire the property and the foreclosure sale price is not sufficient
