Legal Question in Real Estate Law in California

Yes.

However, these questions remain: (1) Will it sue? (2) What will it sue over? and (3) Will it win?

Most mortgage lenders are very reluctant to sue defaulting homeowners; generally, lenders just exercise their right to foreclose by trustee sale, and that's the end of the story.

Even so, the homeowner should consider several factors that may affect the lender or note holder's decision to sue:

1. If the lender elects to foreclose by using a trustee sale (rather than going to court for a judicial foreclosure, which takes longer and costs more), the lender won't be able to sue for a shortfall in the proceeds of the trustee's sale.

2. Lenders may be provoked into going through a judicial foreclosure and seeking a deficiency judgment if the homeowner/borrower has fibbed on his loan application or failed to take decent care of the collateral.

3. Lenders are more likely to sue if the borrower obviously has lots of assets, such as other properties.

4. Lenders are more likely to sue over cash-out refinancings.

5. Lenders are less likely to sue homeowners who have been up-front and cooperative.

Unless it was an initial purchase money TD to buy the house, you can be sued for deficiency after foreclosure by any lender that protects their right to do so.