issued unless the court has determined that the fore-
closure sale for the property securing repayment of the 
obligation under the mortgage was conducted in accord-
ance with the following requirements: 
(1) The sale was conducted in a recognized 
market in the manner that is usual with respect to 
such market. 
(2) The sale price of the property was current 
in a recognized market at the time of disposition. 
(3) The sale was otherwise in conformity with 
reasonable commercial practices among dealers in 
property of the type sold. 
(b) DETERMINATION.—A party adversely affected by 
a deficiency judgment may submit to the court evidence 
contradicting the commercial reasonableness of the fore-
closure sale and of any costs incurred in such sale. 
SEC. 5. AMOUNT. 
(a) IN GENERAL.—The total amount recovered by a 
plaintiff in a deficiency judgment arising from an obliga-
tion under a residential mortgage shall be the amount 
equal to— 
(1) the sum of— 
(A) the amount of obligation owed under 
the mortgage, as of the date of the foreclosure 
sale for the property, as determined by the 
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court, with interest on such amount from the 
date of the foreclosure sale at the rate provided 
in the mortgage or related contract; 
(B) if applicable, the amount owing on all 
prior mortgages, liens, and encumbrances, with 
interest; and 
(C) any reasonable costs for, and disburse-
ments of, the action for the deficiency judg-
ment; less 
(2) the greater of— 
(A) the fair market value of the property, 
as determined by an independent appraisal 
completed during either of 10-day periods that 
begin and end upon the date of the foreclosure 
sale; or 
(B) the amount of the sale price of the 
property at the foreclosure sale. 
(b) DETERMINATION OF FAIR MARKET VALUE.—A 
party adversely affected by a deficiency judgment may 
submit to the court evidence relevant to establishing the 
fair market value of the property for purposes of sub-
section (a)(2)(A). 
SEC. 6. PROHIBITIONS ON DEFICIENCY JUDGMENTS. 
(a) NONRECOURSE MORTGAGES.—No action for a 
deficiency judgment arising from the obligation under a 
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residential mortgage may be brought if the terms of the 
mortgage prohibit the recovery of any amount of the obli-
gation due under the mortgage after— 
(1) the residential property securing repayment 
of such obligation is sold at foreclosure sale; or 
(2) the mortgage is foreclosed in the manner 
provided under the law of the State in which the 
property is located. 
(b) LOW-INCOME MORTGAGORS.—In the case of any 
residential mortgage under which the mortgagor is a mem-
ber of a low-income family, the following shall apply: 
(1) PROHIBITION ON ACTION.—No action may 
be brought for a deficiency judgment arising from 
the obligation under such residential mortgage. 
(2) PROHIBITION ON REPORTING DEFICIENCY 
TO
CREDIT
AGENCIES.—A deficiency in recovery, 
from a foreclosure sale for the property securing re-
payment of the obligation due under the mortgage, 
of the full amount of the obligation may not be re-
ported to any consumer reporting agency (as such 
term is defined in section 603 of the Fair Credit Re-
porting Act (15 U.S.C. 1681a)) or disclosed to any 
person other than the mortgagor or a personal rep-
resentative of the mortgagor, unless such disclosure 
is otherwise required by law. 
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A determination of whether a family is a low-income fam-
ily for purposes of this subsection shall be based on the 
income of the family as of the date of the foreclosure sale 
or any other date during either of the 30-day periods be-
ginning and ending on the date of such sale, and shall 
be based upon information obtained from the mortgagor 
during the foreclosure process. 
SEC. 7. DEFINITIONS. 
For purposes of this Act, the following definitions 
shall apply: 
(1) DEFICIENCY JUDGMENT.—The term ‘‘defi-
ciency judgment’’ means a judgment, lien, or court 
order, as provided for under State law, for recovery 
in whole or in part, as determined by a court as just 
and equitable, after a foreclosure or foreclosure sale 
of the property securing repayment of the obligation 
owed under a residential mortgage, of the portion of 
the obligation that remains unsatisfied after applica-
tion of the proceeds of such sale to the obligation. 
(2) FORECLOSURE
SALE.—The term ‘‘fore-
closure sale’’ means, with respect to the residential 
property securing repayment of the obligation under 
a residential mortgage, the sale of the property pur-
suant to foreclosure on the mortgage, whether judi-
cial or nonjudicial, undertaken in accordance with 
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