Deficiency Judgments and Idaho

Short Sales and Deficiency Judgments. A State by State Guide.

What is a Deficiency Judgment?

A deficiency judgment is an unsecured money judgment against a borrower whose mortgage foreclosure sale did not produce sufficient funds to pay the underlying promissory note, or loan, in full.  The availability of a deficiency judgment depends on whether the lender has a recourse or nonrecourse loan, which is largely a matter of state law. In some jurisdictions, first mortgages are non-recourse loans, but second and subsequent ones are recourse loans.

States that follow the title theory of mortgages typically allow non-judicial foreclosure procedures, which are fast, but do not allow deficiency judgments. States that follow the lien theory of mortgages require judiciary foreclosure procedures, but allow deficiency judgments against the debtor.

In Idaho most residential property follows a non-judicial foreclosure procedure.

In Idaho: Lawsuit for deficiency must be brought within 3 months of the public auction. Deficiency limited by fair market value as of the date of the sale.

There can be additional variables, you are urged to consult an attorney if you are contemplating a short sale.