As for the deficiency judgment, it is unusual to seek such a judgment and the only party that can contest it is the borrower. The deficiency is presumed to be the difference between the judgment amount and the money received from a third party sale. But that is only a presumption.
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The borrower can and should ask for proof of economic loss and subpoena, if necessary, the necessary offices and records that would show proof of payment and proof the calculation of the actual economic loss. They will back off after they lose the round of motions for protective orders. They will back off because they never paid for the debt and they never suffered any economic loss. What they got was pure profit.
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I know of no contested case in which a deficiency was awarded in a case where securitization was claimed. For the most part they don’t even try.
Filed under: foreclosure |
Deficiency judgments are enforceable in my state, but judges will rarely enforce. I recall one case that was a mess (again had to trace back prior transactions to see the mess). This person lost anyway in court, but the judge did not enforce deficiency or a second mortgage that sort of disappeared. They foreclosed and the husband inherited some money and bought a small home in PA. Although the judge did not enforce – debt collectors continued to hound them. Only when the husband died did the hounding stop.
I find particularly interesting loans that were funded by two entities. One funds the loan up to the Freddie/Fannie limit, and the rest is funded by another entity. You can speculate why this happened.