What does the deficiency judgment allow the mortgagee to do?

The deficiency judgment allows the mortgagee, typically the lender or financial institution that provided the loan, to claim additional assets from the mortgagor, who is the borrower in this context. When a property is foreclosed and sold, if the sale proceeds do not cover the outstanding loan balance, a deficiency exists. The deficiency judgment enables the lender to pursue the borrower for the remaining amount owed.

This process allows lenders to recoup losses incurred from a defaulted mortgage by seeking payments from the borrower’s other assets, not just the property that was foreclosed. It serves as a legal mechanism to ensure that the lender can attempt to recover the full amount of the debt, reinforcing the borrower’s obligation under the original mortgage contract even after foreclosure.

The other options do not pertain to the role of a deficiency judgment. Adjusting interest rates post-sale or negotiating lower property taxes are separate issues not connected to the collection of debts after foreclosure. Similarly, obtaining a higher loan amount is unrelated, as it deals with the initial approval process for lending rather than the recovery of debts following a default.