Foreclosure Deficiency Judgments

Foreclosure is a legal process whereby a lender seeks to force the sale of a mortgaged property in order to recover the balance of a delinquent loan. Recently, the foreclosure process has been the subject of... more +
Foreclosure is a legal process whereby a lender seeks to force the sale of a mortgaged property in order to recover the balance of a delinquent loan. Recently, the foreclosure process has been the subject of greater legislative and judicial scrutiny after systemic abuses were uncovered during the widespread foreclosure crisis resulting from the Great Recession. less -
News & Analysis as of

CLIENT ALERT: Arizona Supreme Court to Decide if Borrowers and Guarantors Can Waive Fair Market Value Defense

In September 2013, the Arizona Court of Appeals held that commercial borrowers and guarantors cannot prospectively waive their right to seek a fair market value hearing to limit their potential deficiency liability following...more

Fannie Mae Authorizes Servicers To Waive Deficiency Judgment Rights, Announces Other Servicing Policy Updates

On September 8, Fannie Mae advised in Servicing Guide Announcement SVC-2014-16 that servicers now have discretion to waive Fannie Mae’s deficiency judgment rights if doing so will help resolve foreclosure delays based upon...more

Georgia Court of Appeals Expands Lenders' Ability to Pursue Guarantor Deficiency Judgment Suits Beyond Foreclosure Confirmations

The Court of Appeals of Georgia further clarified Georgia's treatment of deficiency judgment suits against guarantors in instances where lenders cannot obtain foreclosure confirmations of secured property. Community &...more

Waiving Statutory Foreclosure Provisions

The recently issued opinion of the Colorado Court of Appeals, in Armed Forces Bank v. Hicks, 2014 COA 74. No. 13CA0875 (June 5, 2014), is significant for commercial real estate lenders. In Hicks, the Bank was the...more

Recent changes to Maryland foreclosure laws

Last month, Robert Scott, a partner here at Ballard Spahr, wrote about recent changes in Maryland foreclosure law. He explained the effect of a new law that requires a foreclosing lender to seek a deficiency judgment in its...more

The Washington Court of Appeals Strengthens the Ability of Lenders to Obtain Summary Judgment Against Commercial Guarantors on...

Post-foreclosure deficiency lawsuits against guarantors of commercial loans can be expensive and time consuming — particularly when measured against the sometimes uncertain collectability of the deficiency judgment. Under...more

Nevada Supreme Court Determines That a Pre-Foreclosure Guaranty Complaint Is Not a Deficiency “Application”

In what the dissenting Justices insinuate is an elevation of form over substance, the Nevada Supreme Court denied a rehearing in Lavi v. Eighth Judicial District Court, 130 Nev. Adv. Op. 38, 2014 WL 2428749 (May 29, 2014),...more

Waive Goodbye to Confirmation Hurdle! Recent Decision from the Georgia Court of Appeals Gives Lenders an Alternate Route to...

By most accounts, a decision from the Georgia Court of Appeals last September represents a sea change in the law governing judicial confirmation of foreclosure sales and post-foreclosure deficiency claims. Indeed, the Court's...more

Borrowers Can Avoid Liability Even After a Trustee’s Sale

Since a lender must have a valid debt and valid lien to conduct a trustee’s sale, a borrower that allows the foreclosure sale to occur impliedly agrees that the debt and lien are valid. In Madison v. Groseth and BT Capital,...more

Real Property, Financial Services & Title Insurance Case Law Updates

I. FLORIDA STATE CASES - Quiet Title: deed reservation of right-of-way in favor of State, which applied only to tracts of land of 10 acres or more, did not attach to title of landowner of less than 10 acres and,...more

And the Bidding Starts At . . .? The Impact of Two Recent Bankruptcy Decisions On Determining Foreclosure Sale Bids

In today’s economy, banks all too commonly find themselves foreclosing on real property collateral. As a result, banks are regularly in the position of having to determine the starting bid in foreclosure proceedings. This...more

An Exception to the Fair Market Value Rule: Use the Foreclosure Sales Price for a Deficiency after a Third Party Purchaser

If the value of a foreclosed property is less than the loan amount, lenders may seek a deficiency judgment from borrowers and guarantors after the foreclosure sale. In most cases, the lender is the sole bidder at the sale and...more

Real Property, Financial Services & Title Insurance Case Law Update: Week Ending January 3, 2014

I. FLORIDA STATE CASES – SARA WITMEYER - - Discovery: guarantors who moved to set aside stipulation to deficiency judgment not entitled to depose corporate representatives of foreclosing plaintiff and assignee of final...more

Prospective Waivers of the Fair Market Value Defense Held Invalid

The Arizona Court of Appeals recently held that commercial borrowers and guarantors cannot prospectively waive their right to limit their damages in a deficiency action on the basis of the fair market value of property sold...more

Creditors’ Deficiency Rights Impacted by Recent Nevada Supreme Court Opinion in Sandpointe Apartments, LLC v. Eighth Judicial...

On November 14, 2013, in Sandpointe Apartments, LLC v. Eighth Judicial District Court, 129 Nev. Adv. Op. 87 (Nov. 14, 2013), and in Branch Banking and Trust Co. v. Neilson, (Nov. 14, 2013) (unpublished), the Nevada Supreme...more

The Demise of Deficiency Judgments in Residential Loans

Among the many changes in the financial services industry, two important events occurred this year that effectively signaled the extinction of deficiency judgments in loans secured by residential property. ...more

Tennessee’s Deficiency Statute and Out-of-State Deficiency Judgments

We've previously written about Tenn. Code Ann. § 35-5-118, which governs deficiency suits in Tennessee. As explained in that post, a lender is typically entitled to recover its full deficiency unless the foreclosure sales...more

Expansion of California’s Anti-Deficiency Laws Means More Litigation For Creditors

Turning a narrow consumer shield into a potentially broad sword, this summer California expanded its anti-deficiency judgment laws to prohibit not only the judicial pursuit of mortgage deficiency balances, but also to declare...more

“Materially Less”: The Foreclosure Deficiency Standard in Tennessee

Like many other states, Tennessee allows a creditor who has conducted a foreclosure sale of real property secured by a deed of trust or mortgage to recover "a deficiency judgment in an amount sufficient to satisfy fully the...more

Georgia Court Reiterates that Creditors Seeking Deficiency Judgments Must Adhere to 30-Day Foreclosure Sale Confirmation Rule

In a recent opinion, the Georgia Court of Appeals reaffirmed that creditors who wish to seek deficiency judgments following a non-judicial foreclosure must seek to have the sale confirmed within 30 days of the sale....more

California Appeals Court Holds Foreclosure Deficiency Judgment Protections Apply To Short Sales

On July 23, the California Court of Appeal, Fourth Appellate District, held in a case of first impression that a section of California law that prohibits a deficiency judgment following a foreclosure on a purchase money loan...more

Infobytes - A Weekly In-depth review of news & developments in the financial services industry - July 26, 2013

In This Issue: - FEDERAL ISSUES - STATE ISSUES - COURTS - MISCELLANY - FIRM NEWS - MORTGAGES - BANKING - CONSUMER FINANCE - SECURITIES - E-COMMERCE - PRIVACY/DATA SECURITY - Excerpt...more

Rogers Towers: HB 87 – A Summary of Florida’s New Foreclosure Law – Part 1

In prior posts we analyzed the main components of HB 87, the bill introduced in the Florida legislature which proposed significant changes to certain aspects of Florida’s mortgage foreclosure process....more

Governor Scott Signs Expedited Foreclosure Bills

Legislative Response to the Mortgage Foreclosure Crisis - The mortgage foreclosure crisis has exacted a toll on Florida’s economy and judiciary. In the span of four years, foreclosure filings in Florida increased almost...more

Florida Foreclosure Laws Affected by Governor Scott's Signing of HB 87

On June 7, 2013, Florida Gov. Rick Scott signed HB 87, affecting the state’s foreclosure laws. By its terms, the statute is effective immediately. Below are some of the highlights...more

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