A borrower who lives in a non-recourse state buys a house for $275,000 and takes out a loan for $250,000 (senior mortgage) to finance this purchase. A few years after the original purchase, the outstanding loan balance is now $240,000 but the property value has declined and this borrower defaults on the loan and the property is sold in a foreclosure sale for $220,000. Can the lender seek a deficiency judgment against this borrower? If so, for how much?

a. Yes, the lender may seek a deficiency judgment for $20,000

b. Yes, the lender may seek a deficiency judgment for $25,000

c. Yes, the lender may seek a deficiency judgment for $35,000

d. Yes, the lender may seek a deficiency judgment for $55,000

e. No, the lender may not seek a deficiency judgment

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