What can a mortgagee sue for if the foreclosure sale does not meet the outstanding mortgage debt?

A mortgagee can sue for a deficiency judgment if the amount obtained from the foreclosure sale is less than the outstanding mortgage debt. This legal recourse allows the lender to recover the remaining balance after the property has been sold. When a foreclosure sale occurs, the proceeds are used to pay off the mortgage debt; however, if these proceeds fall short, the lender can seek a deficiency judgment against the borrower for the difference. This process reflects the lender’s right to seek full repayment of the loan even after the property has been sold in foreclosure, addressing the gap between the sale price and the amount owed.

This legal mechanism is significant as it holds borrowers accountable for the total loan obligation and ensures that lenders have the opportunity to mitigate their losses when the collateral (the property) does not cover the full amount of the debt.