Also known as: outstanding balances · balance due · unpaid balance
Written by attorneys — see sources below.
The unpaid amount remaining on a secured obligation after application of payments and credits. In mortgage contexts this figure determines the extent of any deficiency judgment after a foreclosure sale.
Odette Orozco borrowed from Oceanview Properties to purchase a warehouse. After default the property sold at foreclosure for less than the remaining debt. Oceanview Properties brought an action against Odette Orozco seeking recovery of the difference between the sale price and the unpaid amount on the note.
Orla O'Malley devised a parcel to her niece Oakley Osei. Before death Orla O'Malley sold the parcel on an installment contract. At death an unpaid amount remained due from the buyer. The court directed that Oakley Osei receive the remaining payments rather than treating the sale as complete ademption.
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View caseThe deficiency equals the amount by which the mortgage obligation exceeds the foreclosure sale price. A mortgagor may request a fair-market-value determination that can reduce or eliminate the deficiency.
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Yes. When a testator sells property subject to an installment contract and an unpaid amount remains due at death, the specific devisee is entitled to receive the remaining payments under nonademption statutes.
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A junior mortgagee may obtain a deficiency judgment limited by the fair market value of the property at the time of the senior foreclosure sale rather than by the full amount of the junior obligation.
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