Ignorance regarding deficiency judgments can cause both unnecessary worry and unncesessary harm if you do not act accordingly and with legal counsel.
A deficiency is the difference between what the court says you owe on a mortgage and what the property sells for at a foreclosure sale. South Carolina is a one action state. That means that the action to foreclose and the action to obtain a deficiency judgment is the same legal action. The first place to look is the complaint for foreclosure. The deficiency is either demanded or waived. If it is not expressly waived, then it is still demanded by the lender. You can tell if it is waived by reading the Complaint. Normally the first page of the complaint will have the words “Deficiency Demanded” or “Deficiency Waived” in the caption under the words complaint. This will be to the right of the list of parties.
If the deficiency is waived, the plaintiff cannot then later request a deficiency. The only remedy a lender has in that action is to sell the house for full satisfaction of the debt. They cannot later seek any more money on that debt. (This does not include second mortgages and guarantees and other situations. You will need to seek counsel for your specifi case. You may owe taxes, but that is a subject for your CPA.)
If the lender is requesting a deficiency, then that means they will sell the house, obtain a judgment for the differnece in sale price and the amount owed, and then go after you for payment on the judgment. There is no uniformity on banks and lenders as to which way they will go. Most people believe only way to get rid of the deficiency after the sale is to pay it off or to file bankruptcy.
South Carolina gives mortgagors Appraisal Rights. This means that they can request an appraisal be conducted and that the higher of either the appraised value of the property or the foreclosure sale price be applied to the debt. This could either eliminate or reduce the judgment. Appraisal rights are somewhat technical and you should consult counsel before trying to deal with these issues on your own.
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