Diana, a California homeowner, files a declared homestead on her primary residence. The home has a fair market value of $900,000, a mortgage balance of $500,000, and the current California homestead exemption is $300,000. A judgment creditor obtains a court order for forced sale. What is the MOST likely outcome?
Correct Answer
A) The sale proceeds, and Diana receives the first $300,000 of equity after the mortgage is paid
Under California CCP §704.800, in a forced sale of homesteaded property, the mortgage is paid first from the sale proceeds. Diana's equity is $400,000 ($900,000 - $500,000). The homestead exemption of $300,000 is then protected and paid to Diana. The remaining equity of $100,000 would be available to satisfy the judgment creditor. Diana receives her $300,000 exemption from the equity after the mortgage is satisfied.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A variance is an authorized deviation from the existing zoning ordinance granted to a property owner who demonstrates unique hardship. It allows a use or structure that would otherwise violate the current zoning rules.
Wetlands protection refers to federal and state regulations that restrict development on wetlands — areas where water covers the soil or is near the surface for part of the year. The primary federal authority is the Clean Water Act enforced by the Army Corps of Engineers.
Zoning is the government's division of land into districts with specific permitted uses such as residential, commercial, industrial, or agricultural. It is the most common exercise of police power over private property.
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