Antideficiency Protections Under 580b, 580d, and 580e Amended and Clarified

  Antideficiency protections have been clarified by July 2013 legislation amending Code of Civil Procedure sections 580b and 580d. SB 426 amends those sections and clearly provides that the prohibitions contained in sections 580b and 580d include collecting or even owing a deficiency. The amendment further clarifies that the prohibition extends only to the borrower and the borrower’s non-encumbered assets — not to 1) guarantors, pledgors, or other sureties; or, 2) that might be satisfied from other collateral pledged to secure the obligation. Continue reading

580b Purchase Money Antideficiency Protection Applies to Short Sales

  In a case of first impression, the Fourth Appellate District in Coker v. JP Morgan Chase Bank, holds that the antideficiency protections of Code of Civil Procedure section 580b apply to any loan used to purchase residential real property, commonly referred to as a “purchase money loan,” regardless of the mode of sale. Continue reading

580e Short Sale Antideficiency Protections Not Retroactive

  Code of Civil Procedure section 580e provides protection to homeowners from a deficiency judgment when a short sale has been approved by the lender. Originally the section provided protection only from lenders whose notes were secured by a first deed of trust. In July 2011, section 580e was amended to expand antideficiency protection in the event of a short sale to any deed of trust, including junior lienholders, if the holder of said deed of trust consented to the short sale and received proceeds from the sale as agreed. Continue reading