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Real property

deficiency balance on foreclosure

A deficiency balance on foreclosure—also known as a mortgage deficiency or deficiency balance—occurs when a home or property is foreclosed on and the sale proceeds are not sufficient to pay off the mortgage. The remaining balance owed on the mortgage is a deficiency balance or mortgage deficiency.

Laws vary from state to state and a state’s laws and the terms of the mortgage may determine whether the mortgage lender (bank or mortgagee) will pursue a mortgagor who defaulted on a mortgage for any deficiency balance.

In New Hampshire, if a property is foreclosed upon and the sale does not generate enough funds to cover the outstanding mortgage balance, the lender may seek a deficiency judgment against the borrower for the remaining amount. This is known as a deficiency balance or mortgage deficiency. New Hampshire is a recourse state, which means that lenders have the right to pursue this deficiency balance. However, the lender must follow specific procedures to obtain a deficiency judgment, including filing a lawsuit against the borrower within a certain time frame after the foreclosure sale. The borrower has the right to contest the deficiency judgment in court. The terms of the original mortgage agreement and state statutes will influence the lender's ability to pursue and collect a deficiency balance.

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Real property

deficiency balance on foreclosure

Individual & Family Legal Plan

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New-Hampshire State Code

New-Hampshire State Code

Real property

deficiency balance on foreclosure

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