If a buyer defaults on both a first and second trust deed, what can the bank achieve?

When a buyer defaults on both a first and second trust deed, the bank has the right to pursue a deficiency judgment to recover the remaining debt after a foreclosure sale. A deficiency judgment occurs when the proceeds from the foreclosure sale are insufficient to cover the outstanding balance of the loan. This means that if the property sells for less than what is owed on the trust deeds, the bank can legally seek a judgment against the borrower for the difference.

In North Carolina, like many states, the lender can pursue this legal action following a foreclosure process. If the bank goes through the foreclosure and the sale does not cover the total amount owed on the first and second trusts, they can then take steps to obtain a deficiency judgment to collect the shortfall. This allows the lender to enforce the obligation to pay back the remaining balance, even after the property has been taken through foreclosure.

While other options like non-judicial foreclosure might also be valid in some contexts, they do not specifically address the action the lender can take regarding the financial deficit created by the default. Mediation with the seller and short sale approval are not relevant to the debt recovery aspect after a default on both trust deeds.