Legal Question in Real Estate Law in California

Re: foreclosure

No. A lender that chooses to foreclose by trustee sale cannot obtain a deficiency judgment. However, the lender might be able to sue the borrower for something else. For example, lenders have been known to go back to the loan application and look for falsely-overstated income or assets, and then to sue the borrower for loan-application fraud. Another lender suit sometimes seen is for what is called "waste" in legal jargon. Here's what this is all about: the borrower agrees to take good care of the collateral so that it doesn't lose value avoidably. You have to pay the property taxes, keep it insured, fix leaking pipes, etc. If you have failed to do so, and leaking pipes or roof caused the collateral to suffer severe damages, you may be sued for waste. Another example of waste (as the term is used in legalese) that I like to use is logging off all the landscape trees and selling the logs to the sawmill two weeks before the foreclosure sale. Desperate homeowners do sometimes neglect or strip the property when their finances are going down the tubes, and the lender's remedy is a suit for waste