Deficiency Judgment Chart After Foreclosure

This legal chart is intended to provide a quick and easy guide to determine when a borrower may be liable for a deficiency judgment after foreclosure.  There are other factors and conditions which may change the result such as fraud by the borrower and bad faith waste.  For information on deficienciesafter a short sale, please see our “Short Sale Deficiencies Fact Sheet“.

Residential 1 – 4 units, Owner Intends to Occupy a Unit in the Secured Real PropertyNon-owner Occupied or Other Real Property
Lender Purchase Money Loan; and any refinance of a purchase money loan1made on or after January 1, 2013
(non-recourse loan)
Seller Financed Purchase Money Loan
(non-recourse loan)
Any refinance made before January 1, 2013; and any cash out refinance loan or cash out portion of such a loan no matter when made3
(recourse loan)
Lender Purchase Money Loan
(recourse loan)
Seller Financed Purchase Money Loan
(non-recourse loan)
Refinance (Non-Purchase Money Loan)
(recourse loan)
NO
deficiency judgment if senior or junior lienholder2
Cal. Code Civ. Proc. § 580b
NO
deficiency judgment if senior or junior lienholder2
Cal. Code Civ. Proc. § 580b
YESdeficiency judgment if judicial foreclosureNO
deficiency judgment if trustee’s sale foreclosure(But YES if lienholder is a “wiped out” junior4)Cal. Code Civ. Proc. §§  580d, 580b
YESdeficiency judgment if judicial foreclosureNO
deficiency judgment if trustee’s sale foreclosure(But YES if  lienholder is a “wiped out” junior4)Cal. Code Civ. Proc. §§  580d, 580b
NO
deficiency judgment if senior or junior lienholder2
Cal. Code Civ. Proc.
§ 580b
YESdeficiency judgment if judicial foreclosureNO
deficiency judgment if trustee’s sale foreclosure(But YES if  lienholder is a “wiped out” junior4)Cal. Code Civ. Proc. §§  580d, 580b

Footnotes

1. This Category comprises the refinance of a purchase money loan and any subsequent refinance including any fees, cost or related expenses of the finance, but does not include any cash out portion of the refinance.

2.  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.

3. The law specifies that any cash out portion of a refinance of a purchase money loan will not receive anti-deficiency protection under CCP § 580b while the balance of such a loan will receive protection (if made on or after January 1, 2013). “Cash out” means when the lender advances new principle which is not applied to any obligation owed or to be owed under the purchase money loan, or to fees, cost or related expenses of the refinance.

4.  In general, the foreclosing lienholder at a trustee’s sale (as opposed to a judicial foreclosure) will lose its claim to any deficiency. However, a lienholder that is junior to the foreclosing lienholder will retain its right to claim a deficiency unless that junior lienholder is a residential 1-4, owner-occupied purchase money loan; refinance of such loan if made on or after January 1, 2013, or a seller carry-back.


This legal article is just one of the many legal publications and services offered by C.A.R. to its members. For a complete listing of C.A.R.’s legal products and services, please ask Raquel Comstock. Readers who require specific advice should consult an attorney.

Raquel Comstock
Realtor, lic# 01091437
Realty Executives
3610 Central Ave., Ste. 400
Riverside,CA 92506
Phone:(951) 335-0088
Cell: (951) 289-5869

Category : Uncategorized

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