This legal chart is intended to provide a quick and easy guide to determine when a borrower may be liable for a deficiency judgment. There are other factors and conditions which may change the result (such as fraud by the borrower and bad faith waste). For more details see the legal article, Deficiency Judgments and California Law.
| Residential 1 - 4 units, Owner Intends to Occupy a Unit in the Secured Real Property | Non-owner Occupied or Other Real Property | ||||
|
Lender Purchase Money Loan |
Seller Financed Purchase Money Loan (non-recourse loan) | Refinance (Non-Purchase Money Loan) (recourse loan) |
Lender Purchase Money Loan | Seller Financed Purchase Money Loan (non-recourse loan) | Refinance (Non-Purchase Money Loan) (recourse loan) |
|
▼ |
▼ |
▼ |
▼ |
▼ |
▼ |
| NO deficiency judgment if senior or junior lienholder* Cal. Code Civ. Proc. § 580b |
NO | YES deficiency judgment if judicial foreclosure NO deficiency judgment if trustee's sale foreclosure Cal. Code Civ. Proc. § 580d | YES deficiency judgment if judicial foreclosure NO deficiency judgment if trustee's sale foreclosure Cal. Code Civ. Proc. § 580d | NO deficiency judgment if senior or junior lienholder* Cal. Code Civ. Proc. § 580b | YES deficiency judgment if judicial foreclosure NO deficiency judgment if trustee's sale foreclosure Cal. Code Civ. Proc. § 580d |
* If a senior lienholder
forecloses on the property for this type of loan, the "wiped out" junior
lienholder who no longer has a secured note may not sue on this
promissory note.
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article is just one of the many legal publications and services offered
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Readers
who require specific advice should consult an attorney. C.A.R. members
requiring legal assistance may contact C.A.R.'s Member Legal Hotline at
(213) 739-8282, Monday through Friday, 9 a.m. to 6 p.m. and Saturday, 10
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Los Angeles, CA 90020
Tel (213) 739-8282
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The information contained herein is believed accurate as of August 2, 2010. It is intended to provide general answers to general questions and is not intended as a substitute for individual legal advice. Advice in specific situations may differ depending upon a wide variety of factors. Therefore, readers with specific legal questions should seek the advice of an attorney. Revised by Sonia M. Younglove, Esq.
Copyright© 2010 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). Permission is granted to C.A.R. members only to reprint and use this material for non-commercial purposes provided credit is given to the C.A.R.Legal Department. Other reproduction or use is strictly prohibited without the express written permission of the C.A.R. Legal Department. All rights reserved.