Deficiency Judgments--a New Look (Servicing‪)‬

In these most extraordinary times, are deficiency judgments really something to think about and plan for? There may be two schools of thought on the subject. Skeptics would point to the subprime crisis and say too many borrowers are in deep distress; they just don't have any money. And what's more, deficiencies are bad for public relations. The other school of thought is that because of the severe decline in price for so many properties, deficiencies are now often assured. Some borrowers who defaulted did so not necessarily because they were unable to pay, but precisely because the property was worth less than the mortgage. They may very well be able to make good on a deficiency judgment.