Legal Question in Real Estate Law in California

Re: Post foreclosure collections????

If a home is foreclosed non-judicially, meaning through the trustee's sale, the foreclosing beneficiary cannot obtain a deficiency judgment. A deficiency judgment is a judgment for the difference between what was owed and what was foreclosed on. This has been prohibited in California by Code of Civil Procedure section 580d since the Great Depression.

If a home is foreclosed on judicially, meaning by way of lawsuit, then Code of Civil Procedure section 580b prohibits a deficiency judgment on a purchase money mortgage. There is extensive case law on when this does and does not apply.

I hope this answers your question.

Very truly yours,

Re: Post foreclosure collections????

In addition to what Mr. Roach says, which is absolutely correct, keep in mind that no one [except for a mechanic's lien, an exception created by the California Constitution] can "file a lien" as a matter of private action. Liens can be created by failure to pay taxes to the government, or privately by the consent of the person subject to the lien, as when you borrow. However, someone who simply claims you owe them money, and who is ineligible to file a mechanic's lien, has to go to court and get a judgment first. Then, the creditor can record an abstract of judgment which will affect your property in the county where the abstract of judgment is recorded.

Having said all this, it is remotely possible that you gave the lender additional collateral at the time the foreclosed loan was made. If the vacation home was pledged back then, I think it might remain subject to the lien you voluntarily created back then - but this is, as I say, a remote possibility and I'm not even sure without research that the lender could initiate an action to do a second foreclosure on the additional collateral.

There are two other possible dangers to consider, either of which might give the lender a right to sue independent of the foreclosed deed of truse. The first is "waste," i.e., if you deliberately or negligently reduced the value of the foreclosed property by cutting down its trees or failing to fix a leaky roof. The second is loan fraud - if you deliberately misrepresented something on your loan application, the lender could go after you for that.