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Home | News | Foreclosure | Bill Proposes Limitations on Deficiency Judgments
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Bill Proposes Limitations on Deficiency Judgments

Rep. Ed Towns (D-New York) has introduced a new bill to limit the period of time during which a bank can bring deficiency judgments against foreclosed borrowers.

Currently, the window during which a lender may pursue a deficiency judgment varies by state and can be anywhere from six months to six years.


The Fairness in Foreclosure Act (H.R. 3566) would prohibit lenders from pursuing deficiency judgments more than 12 months after foreclosure, except in states with shorter windows for deficiency judgments.

The act also aims to restrict deficiency judgments against all low-income families.

Additionally, if the amount secured through foreclosure sale does not recover the full amount owed to the lender, the bank would not be allowed to report the deficiency to consumer reporting agencies as an unpaid debt from the borrower.

""A deficiency judgment after foreclosure seems to be one of the greatest injustices that occur to homeowners after they have gone through the arduous foreclosure process,"" Towns stated in a press release announcing the Fairness in Foreclosure Act.

""Not only are they behind by thousands of dollars on their mortgage payments and facing public auction of their houses, the ordeal may continue indefinitely,"" Towns continued.

About Author: Krista Franks Brock

Krista Franks Brock
Krista Franks Brock is a regular contributor to and She previously served as managing editor of DS News magazine. Prior to joining DS News, she was managing editor of Southern Distinction, a regional lifestyle magazine based in Athens, Georgia. She is currently a freelance writer and editor for various online and print publications. She holds degrees in journalism and art from the University of Georgia, where she also earned a minor in Spanish.

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