A deficiency judgment is typically in an amount equal to the difference between the funds received from a court sale of property and the balance remaining on a debt. Deficiency judgments are commonly issued when a property owner fails to pay amounts owed on a mortgage and the property securing the mortgage is sold to satisfy the debt, but the proceeds from the sale are less than the amount owed.
Deficiency judgments are not allowed in all states. In order to get a deficiency judgment in most states, the party owed money must file a suit for judicial foreclosure instead of just foreclosing on real property. However, some states allow a lawsuit for a deficiency after foreclosure on the mortgage or deed of trust. Local laws should be consulted for specific requirements in your area.
A Texas Complaint or Petition to Recover Deficiency after Sale under Trust Deed or Deed of Trust is a legal document filed in Texas when a lender seeks to collect the remaining balance owed by a borrower after the sale of a property through non-judicial foreclosure under a trust deed or deed of trust. It is important to note that Texas is a non-recourse state, which means that in most cases, a lender's recovery is limited to the collateral (the property) and cannot seek a deficiency judgment against the borrower. However, there are exceptions to this rule. There are two different types of Texas Complaint or Petition to Recover Deficiency after Sale: 1. Standard Texas Complaint or Petition to Recover Deficiency after Sale: This type is employed when a lender believes that an exception to the non-recourse rule applies. Exceptions may include instances where the borrower provided a personal guaranty, fraud was committed, waste occurred, or the proceeds of the sale are deemed to be insufficient to satisfy the outstanding debt. The lender must provide evidence supporting the claim and demonstrate that the borrower's liability extends beyond the collateral. 2. Texas Supplemental Cross-Claim or Petition to Recover Deficiency after Sale: In some cases, a lender may have already obtained a judgment against the borrower in a separate legal action, such as a foreclosure lawsuit. If the judgment amount exceeds the proceeds generated from the sale, the lender may file a supplemental cross-claim or petition to recover the remaining deficiency. When preparing a Texas Complaint or Petition to Recover Deficiency after Sale under Trust Deed or Deed of Trust, it is essential to include the following information: 1. Parties involved: Clearly identify the names and addresses of the lender (plaintiff) and the borrower (defendant). 2. Case background: Outline the history of the loan, including details such as the loan amount, the property securing the loan, the executed trust deed or deed of trust, and the non-judicial foreclosure that took place. 3. Alleged exceptions to non-recourse rule: Present the legal basis for seeking a deficiency judgment by providing detailed evidence and arguments to demonstrate why the borrower should be held personally liable for any outstanding balance. 4. Calculation of the deficiency: Provide a detailed breakdown of the foreclosure sale proceeds, outstanding principal balance, accrued interest, and any additional costs or fees incurred by the lender. 5. Prayer for relief: Specify the relief sought by the lender, such as a judgment for the deficiency amount, interest, legal fees, and any other applicable damages. 6. Supporting documents: Attach relevant exhibits, including the executed trust deed or deed of trust, copies of the foreclosure sale documents, any personal guaranty agreements, and any additional evidence supporting the lender's claim for a deficiency judgment. It is crucial to consult with an experienced attorney familiar with Texas foreclosure laws and the non-recourse rule to draft a comprehensive and legally sound Complaint or Petition to Recover Deficiency after Sale under Trust Deed or Deed of Trust.A Texas Complaint or Petition to Recover Deficiency after Sale under Trust Deed or Deed of Trust is a legal document filed in Texas when a lender seeks to collect the remaining balance owed by a borrower after the sale of a property through non-judicial foreclosure under a trust deed or deed of trust. It is important to note that Texas is a non-recourse state, which means that in most cases, a lender's recovery is limited to the collateral (the property) and cannot seek a deficiency judgment against the borrower. However, there are exceptions to this rule. There are two different types of Texas Complaint or Petition to Recover Deficiency after Sale: 1. Standard Texas Complaint or Petition to Recover Deficiency after Sale: This type is employed when a lender believes that an exception to the non-recourse rule applies. Exceptions may include instances where the borrower provided a personal guaranty, fraud was committed, waste occurred, or the proceeds of the sale are deemed to be insufficient to satisfy the outstanding debt. The lender must provide evidence supporting the claim and demonstrate that the borrower's liability extends beyond the collateral. 2. Texas Supplemental Cross-Claim or Petition to Recover Deficiency after Sale: In some cases, a lender may have already obtained a judgment against the borrower in a separate legal action, such as a foreclosure lawsuit. If the judgment amount exceeds the proceeds generated from the sale, the lender may file a supplemental cross-claim or petition to recover the remaining deficiency. When preparing a Texas Complaint or Petition to Recover Deficiency after Sale under Trust Deed or Deed of Trust, it is essential to include the following information: 1. Parties involved: Clearly identify the names and addresses of the lender (plaintiff) and the borrower (defendant). 2. Case background: Outline the history of the loan, including details such as the loan amount, the property securing the loan, the executed trust deed or deed of trust, and the non-judicial foreclosure that took place. 3. Alleged exceptions to non-recourse rule: Present the legal basis for seeking a deficiency judgment by providing detailed evidence and arguments to demonstrate why the borrower should be held personally liable for any outstanding balance. 4. Calculation of the deficiency: Provide a detailed breakdown of the foreclosure sale proceeds, outstanding principal balance, accrued interest, and any additional costs or fees incurred by the lender. 5. Prayer for relief: Specify the relief sought by the lender, such as a judgment for the deficiency amount, interest, legal fees, and any other applicable damages. 6. Supporting documents: Attach relevant exhibits, including the executed trust deed or deed of trust, copies of the foreclosure sale documents, any personal guaranty agreements, and any additional evidence supporting the lender's claim for a deficiency judgment. It is crucial to consult with an experienced attorney familiar with Texas foreclosure laws and the non-recourse rule to draft a comprehensive and legally sound Complaint or Petition to Recover Deficiency after Sale under Trust Deed or Deed of Trust.
