John and Mary Rose Tessler have had their home taken in foreclosure. They owe $92,000 on their original mortgage and $8,000 on their second mortgage. A contractor they hired to add on a screened porch is owed $2,000, and the contractor has filed a lien. The lender has spent $4,000 in bringing the foreclosure suit. The foreclosure sale brings $80,000. Who makes up the difference between what the sale brings and the amount due on the mortgage?

Question

Quizplus · Accepted Answer

In jurisdictions with an antideficiency statute, the lender cannot pursue the borrower for any deficiency remaining after the foreclosure sale. This means if the sale does not cover the mortgage amount, the lender absorbs the loss and cannot seek the difference from the borrower.

John and Mary Rose Tessler Have Had Their Home Taken