A deficiency judgment is a court order that makes the homeowner liable for unpaid debt. Most commonly associated with foreclosures, deficiency judgments usually occur when the sale price of the home is insufficient to cover the remaining balance of the original home loan. When a home loan is in a state of default and the lender decides to repossess the property from the homeowner, the actual value of the repossessed property doesn’t always cover the remaining balance of the loan. For instance, if a homeowner has his property repossessed and it’s valued at $260,000 but the homeowner still owes $320,000 on the loan balance, the legal action taken in order to recover the remaining balance is considered a deficiency judgment. So, what are the deficiency judgments West Virginia rules?
The Cost of a Successful Deficiency Judgment
When a lender wins in a deficiency judgment case, the homeowner is found to be personally responsible for the base amount of the judgment, among other charges.
- Generally the homeowner will be held responsible for all court costs accrued in the foreclosure, and any costs involved with filing of the deficiency judgment.
- The lender will be allowed to legally require the homeowner to resolve all costs and the balance of the deficiency judgment.
- Lenders are also entitled to take legal means such as garnishing wages or seizing the homeowner’s personal belongings, with some restrictions in many states.
Are Deficiency Judgments Common in West Virginia?
If you live or own property within the state of West Virginia and a lender is threatening you with a deficiency judgment, you should consult a lawyer to deal with your lender because deficiency judgments are typically not allowed in West Virginia. West Virginia has its own regulations when the foreclosure process is involved, but if the sale of a home which is in foreclosure does not cover the remaining balance on the loan the homeowner is not found personally responsible for the lender recovering this cost.
Power of Sale
The state of West Virginia has its own policies regarding cost recovery for lenders through foreclosure proceedings. Most property sales have a contract with a “power of sale” clause, which entitles the lender to have a law firm handle the foreclosure of a property by delivering notice to the homeowner that the mortgage is in a state of default and that the lender is foreclosing on the property to recover the balance of the original loan. There are strict guidelines and statutes when it comes to the legality issues that surround a delivery of the notice of intent to sell from a lender.
Getting Help
Anytime a homeowner receives a notice of intent to sell from his or her lender or an attorney, the homeowner’s first move should be to contact a lawyer and make sure the notice was not delivered or action has not been taken illegally. Your lawyer can help you understand the rules regarding what a lender can do to recover the debt you owe.
