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Jurisdictional Impact on Recovery of Deficiency
As the overall volume of new foreclosures finally decreases, default servers and investors are looking for ways to recover their losses from the recent foreclosure boom. Prior to the economic downturn of 2008, investors could expect to recover the full amount of a borrower's outstanding debt at foreclosure sale in a substantial number of cases. In more recent years, however, the outstanding debt (including principal, interest, escrow advances, property preservation, and other foreclosure costs) often exceeds the deflated market value of the collateral real property. The high volume of disparities between amounts owed and property values has required investors to consider various factors in determining whether they can, or should, pursue a deficiency in any given foreclosure case.