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. 
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