October 2, 2017

deficiency judgment ct

Deficiency Judgments are allowed in Connecticut!

Did you know that if you let your home foreclose in CT, the lender can still pursue you for their losses with a deficiency judgement? If a home had a $200,000 mortgage, and it foreclosed and sold for $150,000…the lender can still sue you for their $50,000 loss and then collect.  Foreclosures do nothing to wipe away your mortgage debt. Your best bet to avoid a CT deficiency judgment is with a short sale.

Picture if house with ball and chain

A short sale however, gives you the opportunity to negotiate the terms of approval:

Let’s assume that same house on which you owe $200,000 is being sold to a buyer in a short sale for $150,000. In order for the sale to move forward to closing, you must be comfortable with the terms of the approval, which are clearly detailed in a short sale approval letter.


This means the lender is fully forgiving the balance on the mortgage  in order to allow the short sale to happen and avoid having to foreclose on the property.

Once in a while, a lender will request some type of contribution from our sellers in order to get the short sale approved and the deficiency waived. Some sellers are targeted more often than others, but even when a contribution is part of the deal – it is usually a fraction of the amount of the deficiency.

Very rarely (less than 1% of the time) a lender will simply refuse to waive their right to collect a deficiency. In these cases our sellers can decide to move forward with the short sale, or seek an alternative solution. The few times this has happened all sellers have decided to still move forward to avoid a foreclosure.

If you owe more than your home is worth and need to get out, the best way to minimize the damages and avoid future financial liability is almost always a short sale.

Reid Real Estate Group specializes in Connecticut short sales and has been the state’s #1 short sale team since 2010.

Find out if a short sale may be an option for you

Last Updated on October 7, 2017 by Minna Reid

About the author 

Minna Reid

Minna Reid is The Broker - Owner of Reid Real Estate Group. Reid Real Estate Group is a full-service Connecticut residential real estate brokerage, specializing in helping homeowners with legal and financial challenges including short sales, probate sales and tax lien complications.

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