Legal Question in Real Estate Law in California
Can Lender file a deficiency after trustee sale?
I got ntice of default and the trustee number, my loan is a refinance loan which is
a recourse loan. If lender did not choose to have a court action to foreclose the house, can they still go after me after the trustee sale for the deficiency?
3 Answers from Attorneys
No. There is a legal doctrine called the one form of action rule. A lender can proceed concurrently with the trustees sale process and a judicial foreclosure and deficiency action in court, but once they go to trial or sale, they cannot proceed with the other.
Mr. McCormick is correct; a trustee's sale waives a lender's right to a deficiency judgment. The only twist is if you have a second mortgage or a line of credit. The foreclosure of the first loan will wipe of the lien of the second, but not the debt. So the holder of the second loan could file an action against you to collect those sums due.
I think this is a duplicate posting. Please see my answer to the other posting of the same question.
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