Explanation

If your house sells for enough money to cover the amount of the loans against it, the lender is made whole.

If the house sells for less than the loan there is a "deficiency."

After a trustee’s sale, the lender is unable to go after the borrower personally for any deficiency—a major disadvantage for the lender.

In most states, anti-deficiency laws only apply to purchase money loans. These are loans made for the actual purchase of your property. If you took out a second loan, such as a Home Equity Line of Credit (HELOC) or refinanced, you are probably not covered by the anti-deficiency rules.

State's vary in their rules regarding deficiency judgments and you should check the summary for your state in the State-by-State Foreclosure Guide. You should also follow the link to your state's statutes.