A California borrower defaults on a non-purchase money deed of trust secured by their primary residence. The beneficiary chooses non-judicial foreclosure through a trustee's sale. After the sale, there is a $50,000 deficiency. Can the lender pursue a deficiency judgment?
Correct Answer
C) No, California prohibits deficiency judgments after a non-judicial trustee's sale regardless of loan type
Under California Code of Civil Procedure §580d, no deficiency judgment is allowed after a non-judicial foreclosure (trustee's sale), regardless of whether the loan is purchase money or non-purchase money. By choosing the faster trustee's sale, the lender waives the right to a deficiency judgment.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
Discount points are upfront fees paid to a lender at closing to reduce (buy down) the interest rate on a mortgage loan. One point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
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