Finance
An Oregon borrower has a deed of trust on their property. The borrower defaults on the loan. After the trustee's sale, if the sale proceeds are less than the amount owed, this is called a:
AShort sale
BDeficiency✓ Correct
CForeclosure surplus
DReceivership
Explanation
A deficiency is the amount by which the loan balance exceeds the proceeds from the foreclosure sale. Oregon has anti-deficiency statutes that limit lenders' ability to pursue the borrower for deficiency amounts after certain types of foreclosures.
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Key Terms to Know
Deed of Trust
A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
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