A trustee sells a California home under a power of sale for $540,000 against a debt of $612,000, leaving $72,000 unpaid. May the foreclosing lender collect this shortfall from the borrower after the completed nonjudicial sale?
Correct Answer
B) No deficiency may be collected after a sale under the power of sale
Section 580d bars a deficiency after a sale under a power of sale in a deed of trust: none is owed, collected or rendered. Other choices: there is no three-month window to sue; the borrower is precisely who cannot be pursued; and returning to court is what the section forecloses, which is why a lender wanting a deficiency forecloses judicially instead. Source: Cal. Code Civ. Proc. § 580d
Why This Is the Correct Answer
Section 580d bars a deficiency after a sale under a power of sale in a deed of trust: none is owed, collected or rendered. Other choices: there is no three-month window to sue; the borrower is precisely who cannot be pursued; and returning to court is what the section forecloses, which is why a lender wanting a deficiency forecloses judicially instead. Source: Cal. Code Civ. Proc. § 580d
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