In either a short sale or a deed in lieu of foreclosure, there is a difference between the amount the borrower owes and the amount the lender actually receives in the transaction. In a short sale, it’s the difference between the mortgage balance and the sale price. In a deed in lieu of foreclosure, it’s the difference between the mortgage balance and the market value of the home. Most states allow lenders to seek judgments against borrowers for that difference, known as a deficiency balance.