A borrower in California obtains a purchase money deed of trust to buy a single-family home as their primary residence. Two years later the borrower defaults and the lender pursues judicial foreclosure. The sale produces a $30,000 deficiency. Can the lender obtain a deficiency judgment?
Correct Answer
C) No, because California prohibits deficiency judgments on purchase money deeds of trust regardless of foreclosure method
Under California Code of Civil Procedure §580b, no deficiency judgment is permitted on a purchase money deed of trust, regardless of whether foreclosure is judicial or non-judicial. This protection applies to the original purchase money lender.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Closing costs are the fees and expenses paid by the buyer and seller at the closing of a real estate transaction, beyond the purchase price. They typically range from 2-5% of the purchase price.
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. It is originated and funded by private lenders and may be conforming or non-conforming.
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.
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