If you experience property foreclosure in the state of Wyoming, then you should be aware that you may be subject to a deficiency judgment and you must understand the deficiency judgment Wyoming rules. An understanding of what this is, the state’s foreclosure process and how Wyoming enacts deficiency judgments may help you better navigate the process if you should find yourself having to do so.
What is a Deficiency Judgment?
A deficiency judgment occurs when a mortgage lender imposes a personal liability on the borrower (i.e., the homeowner in most instances) for the balance that remains if the sale of a foreclosed property fails to garner the total amount owed at the time of the sale. In other words, if the property is auctioned for less than the amount that the borrower owes, then the lender may pursue a deficiency judgment against the borrower in efforts to recoup the difference.
Types of Foreclosures in Wyoming
There are two types of foreclosures that lenders may pursue in Wyoming—non-judicial and judicial. The method enacted is contingent on the stipulations outlined in the mortgage agreement.
- If the agreement has a power of sale clause, then the lender may foreclose and sell the property without clearance by a state court as long as the lender adheres to the public notice and sale regulations mandated by law and/or the mortgage agreement.
- If the agreement does not have a power of sale clause, then the lender must file suit against the borrower in state court and a judge will decide if the property should enter foreclosure before either a public notice or a sale occurs.
Wyoming Deficiency Judgments
The state permits a lender to issue a deficiency judgment against a borrower if the foreclosed property sells for less than the value of the mortgage. For example, if a property sells for $100,000 at a foreclosure sale, but the borrower owes $125,000, then the lender may pursue the borrower for the remaining $25,000. This is true even though the borrower no longer owns the property following the foreclosure sale.
Although someone else other than the borrower now owns the property, a deficiency judgment declares the borrower legally responsible for the difference between his loan amount and the price at which the property sold at foreclosure. Moreover, this type of judgment cannot be included in a Chapter 7 bankruptcy filing. Unfortunately, the borrower may continue to owe significant dollars on a property that is worth less than he owes and for which he will continue to pay for many years to come.
Getting Help
To avoid the possibility of a deficiency judgment, you should consult with an experienced attorney who can help you to work with your lender to avoid foreclosure. Your attorney can explain all your options to you and help you protect yourself from a judgment following a foreclosure.
