Which of the following is TRUE about California's anti-deficiency rules after non-judicial foreclosure?
Correct Answer
C) The lender cannot pursue a deficiency judgment after a non-judicial foreclosure
California's anti-deficiency statute prohibits lenders from pursuing a deficiency judgment after a non-judicial foreclosure sale, even if the sale proceeds don't cover the full debt.
Why This Is the Correct Answer
California's anti-deficiency statute prohibits lenders from pursuing a deficiency judgment after a non-judicial foreclosure sale, even if the sale proceeds don't cover the full debt.
Why the Other Options Are Wrong
Option A: The lender can pursue a deficiency judgment for the remaining balance
Deficiency judgments are specifically prohibited after non-judicial foreclosure in California.
Option B: Deficiency judgments are allowed only for investment properties
The protection applies to all non-judicial foreclosures, not just investment properties.
Option D: The borrower must pay the deficiency within 90 days
There is no 90-day payment requirement because deficiency judgments are not allowed.
Memory Technique
CA -> ca-foreclosure-property-servicing-and-debt-collection
Exam Tip
Legacy California general items should be used sparingly; they are kept officially supported for existing content but new MLO growth should focus more on DFPI/DRE, CFL, CRMLA, covered-loan, and usury rules.
Common Mistakes to Avoid
- -Using a national baseline answer when California has agency-specific DFPI or DRE requirements
- -Confusing CFL, CRMLA, covered-loan, usury, servicing, and DRE endorsement rules
- -Relying on legacy California state-exam or education assumptions instead of current NMLS source pages
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