The amount for which a mortgagor/ borrower facing foreclosure is held personally liable if the sale proceeds of the foreclosed property do not cover the amount owed to the mortgagee/ lender. A deficiency judgment is an unsecured money judgment against a borrower who is unable to settle the dues relating to a promissory note or a loan, in full, out of the proceeds of mortgage foreclosure. In other words, a “deficiency” constitutes the difference between what a borrower owes on a mortgage and sale proceeds of the foreclosed property. Deficiency judgment initiates if the foreclosure sale price is less than the amount remaining on a mortgage. However, the judgment over the deficiency pertains to the overall obligation and not only for the deficiency.

Any recoveries from a foreclosure sale would be set against and deducted from the amount covered by the judgment.