Finance
A Minnesota property is sold through a short sale for $280,000, but the outstanding mortgage is $320,000. The $40,000 difference is called the:
AForeclosure gap
BDeficiency balance✓ Correct
CShort sale discount
DEquity shortfall
Explanation
In a short sale, the $40,000 difference between the sale proceeds and the loan balance is the deficiency. In Minnesota, the lender may waive the deficiency as part of the short sale approval, or they may retain the right to pursue the borrower for the deficiency balance.
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