What does a deficiency judgment typically apply to?

A deficiency judgment typically applies to mortgage default situations. When a borrower defaults on a mortgage, and the property is foreclosed upon, the lender may sell the property at a public auction. If the sale price is less than the amount owed on the mortgage, there is a deficiency – meaning that the borrower still owes money to the lender after the sale. In such cases, the lender can seek a deficiency judgment to recover the remaining balance from the borrower. This legal decree allows the lender to pursue the borrower’s other assets to satisfy the unpaid debt.

The other choices pertain to different aspects of real estate that do not involve the borrower’s remaining obligations after foreclosure. Property title transfer relates to the legal conveyance of ownership, land use restrictions deal with zoning and property use regulations, and real estate depreciation refers to the decrease in property value over time. None of these situations create a scenario where a deficiency judgment would be relevant.