Bill to Streamline Deficiency Judgment Process Passes Senate

HARRISBURG – A measure sponsored by Sen. Stewart J. Greenleaf, R-Montgomery/Bucks, to streamline a legal process involving creditors was approved by the Senate.

Senate Bill 92, known as the Deficiency Judgment Act, would simplify a procedure regarding deficiency judgments to reduce duplication of effort in the legal system and reduce lenders’ costs caused by such duplication.

The measure, which has the support of the Pennsylvania Bar Association, would establish a procedure for a judgment creditor to petition a court to fix the fair market value of real property sold at sheriff’s sale in cases in which there is real estate securing the same obligation in more than one county.  Such a circumstance pertains primarily to large syndicated loans to borrowers with multiple properties such as retail outlets, motels, and restaurants.

Under the bill, instead of a creditor going from county to county in cases involving real property in more than one county, a single county would be designated as the “deficiency court” for valuation of all the property situated in the commonwealth.  The designation of the deficiency court would go to the court in the county in which the collateral real property of the highest adjusted value is located.