Legal Question in Real Estate Law in California

Re: Deficiency judgment california investment property

A foreclosing lender can obtain a deficiency judgment after a judicial (court) foreclosure, unless the lender was the seller. If the lender elects a trustee sale under the power of sale provision in a deed of trust, it cannot get a deficiency judgment.

In a short sale to the lender, it depends upon what you negotiate. Conceptually, I believe the agreement to accept a price that is "short" of what's owed should preclude any further claims by one party against the other - it's kind of a settlement - but we do hear of short sale contracts that are not final closures and do allow the lender to seek various remedies against the short-selling owner/borrower.

I would just say ask for a deal that closes out the lender-borrower relationship fully and finally, and read anything you sign beforehand.