Legal Definitions - deficiency suit

A deficiency suit is a legal action taken to recover the difference between the amount owed on a mortgage and the amount received from the sale of the foreclosed property. This is also known as a deficiency judgment.

For example, if a homeowner owes $200,000 on their mortgage and the foreclosed property sells for $150,000, the lender may file a deficiency suit to recover the remaining $50,000.

This type of suit is often used in situations where the property value has decreased or the borrower has defaulted on their mortgage payments.

A deficit is a situation where there is a lack or shortage of something, such as money or resources.

For example, a trade deficit occurs when a country imports more goods than it exports, resulting in a negative balance of trade. This can lead to economic challenges for the country.

Another example is deficit spending, which is when a government spends more money than it takes in through taxes and other revenue sources. This can result in a budget deficit and the need to borrow money to cover expenses.