What is a Deficiency Note and what if my lender wants me to sign one?
A deficiency note is like a promissory note agreeing with the lender that you will be responsible for paying some or all of the difference between their net proceeds and the mortgage balance. Every state has different laws covering when a Deficiency Note can be required, but lenders may try to get borrowers to sign them even when they are not required. Second mortgages try this most often, and if it is a Line of Credit they are sometimes successful in requiring it. This is why it is best to have an experienced agent working at your side.
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