Can a deficiency judgment be issued after a foreclosure in California?

Deficiency Judgments After Foreclosure in California. In most residential foreclosures in California, the lender can’t pursue the homeowner for a deficiency. In some states and in certain situations, you might owe your mortgage lender money after a foreclosure sale of your home.

Can a junior lienholder file a deficiency judgment in California?

California law generally prohibits a deficiency judgment following the short sale of a residential property with no more than four units. Junior lienholders are also prohibited from pursuing a deficiency judgment if they agree to the short sale and they receive proceeds as agreed. (Cal.

What can a deficiency judgment be limited to?

The deficiency judgment will be limited to the lesser of: the amount of the debt that exceeds the fair value of the property at the time of the foreclosure sale; or the amount of the debt that exceeds the sale price of the property at the foreclosure sale.

What kind of foreclosure can you get in California?

In California, foreclosures can be either judicial or nonjudicial. Judicial foreclosures are administered though the state court system, while nonjudicial foreclosures have no court supervision and are handled by a trustee. Most residential foreclosures in California are nonjudicial.

Who is liable for deficiency in deed in lieu?

If the deed in lieu documents clearly state that a deficiency exists and the amount, the borrower remains liable for the deficiency. Generally, the deficiency amount is the difference between the fair market value and the total mortgage debt.

How does a deficiency judgment work in California?

The deficiency judgment allows the lender to collect the debt through regular collection methods, like garnishing wages or levying a bank account. Read on to find out when your lender could get a deficiency judgment against you after a California foreclosure, and what happens to a deficiency in a short sale or a deed in lieu of foreclosure.

Can a deficiency judgment be obtained on a foreclosure?

A deficiency judgment may not be obtained when a property in foreclosure is sold through a non-judicial public sale or if the foreclosure relates to a purchase money mortgage. Different rules apply to guarantors of such loans. What statutes govern California foreclosures?

Can a junior lienholder pursue a deficiency judgment?

Junior lienholders are also prohibited from pursuing a deficiency judgment if they consent to the short sale and received proceeds from the sale as agreed. However, if you perpetrate fraud or commit waste with respect to the property (damage it), the lender can go after you for damages.

Can a short sale result in a deficiency judgment?

The lender agrees to accept this “short” amount in exchange for releasing the mortgage lien. Unless the lender agrees to add a provision to the short sale agreement that states the transaction fully satisfies the mortgage debt, the lender generally retains the right to get a deficiency judgment.