Legal Question in Wills and Trusts in California

Whether the lender can sue depends upon the nature of the loan. This is a common question. please see all the prior answers on this web site and then re-post if you still are unclear.

It depends on a lot of facts that you don't provide. Here are some general rules:

If the lender forecloses nonjudicially, by way of a trustee's sale, then the lender is prohibited from suing you for a deficiency judgment by virtue of Code of Civil Procedure section 580d. That section is triggered when the trustee's sale is held.

If the lender forecloses judicially, they can obtain a deficiency judgment as long as the loan was not a purchase money loan. If the loan was purchase money, Code of Civil Procedure sectoin 580b prohibits a deficiency. There are other procedural rules that have to be followed that may limit or preclude a deficiency judgment.

There are also similar provisions governing a short sale. You may want to speak to a competent attorney in this area of law to thoroughly review the matter and advise you as to your options.

To correct Mr. Roach on one point: section 580b only applies to purchase money loans on your principal residence.