does the lender see my deficiency amount when they do a pre-approval?

Probably. Often the credit report will have a statement like 'settled for less than balance due' and there will be a balance showing. You can check for free at www.annualcreditreport.com. You won't get your credit scores on the free report but you'll be able to see most everything else. Even if it doesn't show now, lenders are required to pull a 2nd credit report right before closing to look for new debts, etc. It could show up then.

If you are talking about a collection account that you settled for less than the full balance, the credit report should show a zero balance, and like Charlie said, it will show settled for less than the full balance. If you are talking about a repossessed vehicle, after the bank sells the car at auction, it will show the remaining deficiency balance...hope this helps....

Often this is the case, when the lender runs your credit. To see what is on your credit report, visit www.freecreditreport.gov. Avoid other sites tht offer free credit reports.

Best thing to do is pull your credit and see whats being reported, there have been some good replys here, I agree with Charlie, www.annualcreditreport.com is a good sight to use www. HOMEMORTGAGEXPERT.com

We dont always see the balance, but it almost always says "Settled for less than balance due"

Lender's reports are probably more through than a consumer report like you have obtained. Also lenders pull data from other sources to look for additional property owned as well as outstanding obligations. Since the IRS has been allowing canceled mortgage debt to be excluded from taxation it would appear that you should be ok, especially if the lender has approved you. Consult with your attorney to be sure. In the mean time here some info I found: http://www.irs.gov/Individuals/The-Mortgage-Forgiveness-Debt-Relief-Act-and-Debt-Cancellation

Sorry, but the title insurance company will most likely refuse to insure your new loan, because the judgment would be in a superior postion. Since the judgment is most likely only recorded in the county where you lost the property, if it for some reason does not show up on the credit report, you MAY be able to buy a property in another county, where the abstract record of the judgment has not been filed.

True, the lender will require that they hold first (primary) position, and if the lender approves, they may allow the judgment to attach in a junior position. The fear that the lender has in that situation is, if the judgment creditor takes collection action, such as wage garnishment, you will be unable to pay the mortgage, due to reduced income. Please let all of us know how it comes out. Good luck!