Also known as: selling prices · sale price
Written by attorneys · grounded in primary & secondary sources — see below
The amount realized at a foreclosure sale of property. That amount is compared to the secured debt to determine whether a deficiency or surplus exists.
Sterling Manufacturing defaulted on its mortgage held by Southland Foods. At the foreclosure sale Sierra Santos purchased the plant for $800,000 while the debt stood at $1.2 million. Southland Foods obtained a deficiency judgment against Sterling Manufacturing for the $400,000 shortfall.
Sofia Stern's property sold at foreclosure for $450,000. Under state law she had thirty days to redeem by tendering the sale price plus interest and costs. Sofia deposited the required sum in escrow before the deadline and thereby preserved her right to reclaim the land from the purchaser.
Sasha Stone defaulted on a mortgage held by Spencer Silver. At the foreclosure sale the property brought $95,000 while the debt stood at $70,000. The court ordered the surplus paid first to junior lienholders and the remainder to Stone.
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Sapphire Technologies defaulted on a mortgage. The foreclosure sale produced $310,000 against a $430,000 debt. The mortgagor asserted that fair market value exceeded the sale price and sought an offset against any deficiency.
Santiago Sanchez defaulted. The foreclosure sale realized $310,000. The mortgagee applied that selling price against the debt and pursued the mortgagor for the remaining deficiency balance.
Synergy Systems conducted a foreclosure sale that produced proceeds exceeding the senior debt. Junior lienholder Selena Singh claimed a share of the surplus. The court ordered distribution first to lienholders in priority order and then to the mortgagor.
When the foreclosure sale price falls short of the mortgage debt the difference constitutes a deficiency. The mortgagee may then pursue a personal judgment against any party liable on the obligation unless state law prohibits or limits deficiency recovery.
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The mortgagor must pay the foreclosure sale price together with interest and costs within the statutory period. This payment redeems the property from the foreclosure purchaser.
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No. Many jurisdictions permit the deficiency defendant to offset the deficiency by the amount by which fair market value exceeds the foreclosure sale price. This prevents the mortgagee from obtaining a windfall by purchasing at a depressed price and later reselling at a profit.
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…above the Hickeys’ signatures endorsing the check “Deposit on Purchase of property at Sachem Rd. and First St., Manomet, Ma. Sale price, $44,000.” [^maj-3]: The judgment ordered Mrs. Green to convey Lot S to the Hickeys but, probably by inadvertence, it failed to include an order that it be conveyed only upon payment by…