| Re: How is the deficiency determined?
My understanding is that deficiency occurs in a short sale situation. The bank agrees to an amount less than the loan amount and then you are responsible for the balance unless you can get the bank to accept the short sale proceeds as full satisfaction of your loan and you need to get that in writing. If the house is sold at the trustee sale, that is a foreclosure and I don’t think deficiency has the same meaning anymore. You are now bound by the laws in your state regarding foreclosures and recourse vs non-recourse loans. There is no deficiency for a non-recourse loan, but there can be forgiven debt and tax implications. Someone correct me if I have this wrong. |