Legal Question in Real Estate Law in California

Re: mortgage deficiency judgement in California

I am not aware of any "federal mandate" that would change or overrule state law with respect to deficiency judgments. You should label the BofA rep's. statements are probably a misunderstanding based on a long gossip chain where everything gets changed through inaccurate retelling at each step. I know the Feds are changing the lending rules frequently, but their authority and interest does not extend to tightening state laws giving homeowners relief from deficiency judgments.

The right of a lender to obtain a deficiency judgment does not usually depend upon whether the loan is a first or a second. The deciding factors are usually (1) whether the lender sues for foreclosure in court rather than doing a quick-and-cheap trustee's sale, and (2) whether the loan was purchase money or not. Other factors sometimes intrude, including whether the property was owner-occupied and whether the financing was done by the seller or a third party.

If you are providing advice and/or negotiating deals as a licensed California real-estate broker, I think you have some exposure to liability for misinforming clients and therefore you should become very conversant with the laws and rules through a continuing education or similar program rather than listening to banker gossip or posting on LawGuru and relying on two-paragraph responses to a question about one issue.