In the foreclosure scenarios described, the deficiency is recoverable in which of the following?

• A. Both I and II
• B. I only
• C. II only
• D. No deficiency is recoverable in both I and II

Answer: (D)

The key idea is that a deficiency judgment after foreclosure depends on what the law allows given the loan type and the sale result. A lender only recovers a deficiency if the law permits pursuing the shortfall after the foreclosure sale. Anti-deficiency protections often apply to certain loans, especially purchase-money mortgages on a primary residence, and in some foreclosure processes the statute bars any deficiency claim. Additionally, if the foreclosure sale brings in an amount that fully satisfies the debt, there is no deficiency to recover.

In the scenarios described, the facts align with those protections or with a sale that covered the debt, so no deficiency can be recovered in either case. That makes the choice indicating no deficiency in both scenarios the best answer.