A few years ago, you bought a terribly overpriced home. To you $375,000 or more for that Spanish-style with a pool seemed totally reasonable at the time (won't blame you, so many others did too!!!).
Now, fast forward a couple/few years, the economy tanked, your positive cash flow probably started to become negative, and then, you realized, “Darn this house is flipping expensive, I can barely keep up.” Until you could really no longer keep up and, bye bye went the house.
You walked away, let the house go into foreclosure, and thought you were wiping your hands clean. I don't need to spell the details out for you, since you probably took a front seat on that ride.... 
Your bank took back your house, and you thought that's enough, the money left unpaid has been forgiven, (I mean, after everything you just went through? Right?) clean slate, fresh start for you... Well now, that's just a big fat misunderstanding on your part. There is no way that banks will let this one slide. No, they want what they bargained for, which is the $375,000 you signed that dang mortgage for.
How is the lender going to get back the $150,000 (could be more, could be less) that the foreclosure sale couldn't pay off?
They are going to take you to court for it, lawsuit style!
“Lenders are filing new motions in old foreclosure lawsuits and hiring debt collectors to pursue leftover debt, plus court fees, attorneys’ fees and tens of thousands in interest that had been accruing for years.”
This forms part of an all too familiar process known as DEFICIENCY JUDGMENT. That $150,000 difference that the foreclosure auction didn't pay off, now becomes a deficiency balance ( a.k.a., what you are being sued to pay).
Among those lenders seeking deficiency judgments are your good ole' friends Fannie and Freddie. They can't even part ways with a dime, leaving you to wallow in misery asking, “Why me again??!!!” Seems to me they want those judgments to keep a positive cash flow in their pockets, considering how much they lost during the crash (boggles my mind, but to them it's pretty reasonable & I think they want a bonus!).
Get this, if Fannie and Freddie and the other ones aren't after you, trust me, someone else is... Who may that be? Oh just some private firms that think it's a great idea to purchase the foreclosure judgments with the only intention of SUING YOU for the deficiency and filling their pockets while at the same time making you just a little depressed (this is the real divine comedy here).
The Cherry on Top
Start psychologically preparing yourself for a double whammy (what am I getting at here?)! Yes peeps, lenders/firms have been waiting for the perfect time for you to get back on your feet to take you for all you're worth! Lenders are smart and opportunistic (really, what can you expect?) to say the least, and they've created the perfect strategy:
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You've been foreclosed upon, which means you've had some major financial issues and can't afford a lot of things, and/or your cash flow is not at all like it used to be. Here, lenders think, “O.K. this person is down in the dumps right now, we won't be able to siphon any more money from this poor guy/gal, we'll just give them more time to recuperate and then, BAM! Give them the most epic surprise in history.” Bahahahhahahahahahaha (evil sinister laugh that has been the trademark of every villain that has ever existed).
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Execution of evil plan (stage 2) A couple of years have passed and you start to get on your feet again, you think nothing can be better. Next thing you know.... LIFE RUINED, what a terrible episode of deja vu, except, it's not deja vu, it's real, they're after you again. The lenders waited for the perfect moment to sucker punch you, and then take your money, cause you already know that's their specialty!
The worst part is, people have not nearly recovered at all, they're only making enough to maintain a frugal life (most of them at least). How can banks expect people to come up with that kind of money? Oh yeah, they don't care! Go figure! 
BANKRUPTCY?!
In most cases, filing for bankruptcy is the only formidable solution to get rid of a deficiency judgment debt.
HOWEVER,
Lenders have the opportunity to forgive or waive the deficiency and most do, through short-sale before foreclosure (here, lenders get to accept a new sale, even if it falls below the original mortgage owed). Or, through a deed-in-lieu of foreclosure, where the homeowner gives up the deed to the house (and everything with it). Nevertheless, there are still many homeowners who are, or will be pursued for a deficiency judgment (remember the firms buying the judgments I just talked about? Yeah, they're not going anywhere without their money).
There is no miracle solution to get out of a deficiency judgment, but if you are being pursued for one, call an attorney and talk about what you CAN do to make your situation better. I'm sure they'll have a thing or two under their belt!
Click HERE, to read a previous article explaining the statute of limitations / specifics on deficiency judgments.
