1.                  THE PURCHASE MONEY RULE: 
In California, a lender who loaned you money to BUY your home, which you ORIGINALLY moved into as your primary residence, cannot do anything other than foreclose.  This means if the foreclosure sale does not pay all “purchase money” loans, those lenders cannot sue you for the unpaid balance.  Most importantly, this includes second mortgages used in many 80/20 100% financing deals.   If you REFINANCED any of these loans, or paid down purchase money HELOC and drew down on it again, this rule does not apply. 
 
2.                  THE ONE ACTION RULE: 
In California, a mortgage lender can only take one action against you:  A non-judicial foreclosure, or a judicial foreclosure.  The result of a non-judicial foreclosure is just like the PURCHASE MONEY RULE, a lender can only sell the property and pay the loan.  If the sale does not pay the mortgage, the foreclosing lender cannot get the unpaid balance from you.  However, the lender can get the balance from you in a judicial foreclosure. The good news is judicial foreclosures are too uncertain and costly for lenders that they are almost non-existent.  BUT, (pay attention, this is important) if a junior lender’s security interest is wiped out by a senior mortgage foreclosure, the junior lender can obtain a deficiency judgment for their unpaid balance because they have not had their ONE ACTION against you yet (subject to the PURCHASE MONEY rule of course).  This situation is very common these days for that second mortgage you used to remodel the kitchen and bathroom, or bought that Escalade, or refined a previous second mortgage. 
Article Disclaimer:
Statements and opinions expressed in articles, reviews and other materials herein are those of the authors; the editors and publishers.

While every care has been taken in the compilation of this information and every attempt made to present up-to-date and accurate information, we cannot guarantee that inaccuracies will not occur. The Village REALTORS® will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.

The content of any organizations websites which you link to from The Village REALTORS® are entirely out of the control of The Village REALTORS® and you proceed at your own risk. These links are provided purely for your convenience. They do not imply The Village REALTORS® endorsement of or association with any products, services, content, information or materials offered by or accessible to you at the organizations site.

All copyright and trade marks accessible via the links from The Village REALTORS® are owned by the respective website owners, or their licensors.

FaceBook Coming Soon! Mobile MLS Search
LinkedIn

Contact Us To:
Add your Birthday, Anniversary or any other Special Events to the Community Events Calendar!
This email address is being protected from spambots. You need JavaScript enabled to view it.
Community Calendar

The Village REALTORS® Calendar

Call Tom & Thomy Today!
(510) 278-0800


The Village REALTORS®
1048 Grant Ave.
San Lorenzo, CA 94580
Phone: (510) 278-0800