Why don't lenders like to pursue deficiency judgments?

After a foreclosure, your troubles may not be over. There is a rule for lenders deficiency judgments in some states that allow your lender to come after you to try to collect more money. 

• A foreclosure action is supposed to provide the bank with the money you owe them. This money is supposed to come from the forced sale of the home
• If the sale of your home does not generate enough money to pay the bank back in full, then the bank will be out the additional total owed. In some states, they can come after you for this money and obtain a deficiency judgment

Although this option is available and you are potentially at risk of having this occur, lenders often don't actually pursue deficiency judgments. The reason many lenders may not pursue deficiency judgments is because:

• It will cost them more money to get the judgment, since a separate legal action is required
• Since you got foreclosed on, you probably don't have a lot of cash sitting around. This means that the lender could go to all the trouble of spending the money to get a judgment that you can't even pay. While they can garnish your wages or get liens on your property, it may be very hard for them to collect.

If you find yourself facing a foreclosure action, you should strongly consider speaking with an attorney. Your lawyer can help you to understand your options and risks under the law.