Original Mortage was 80/20 – the 1st was sold off… if I foreclose do the same rules apply to me under anti-deficiancy laws in California?

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

Original Mortage was 80/20 – the 1st was sold off… if I foreclose do the same rules apply to me under anti-deficiancy laws in California?

Both Loans on the property funded at the same time and were used as purchase money. The first was sold off to Indymac bank and the second is still held by the same lender as the time of purchase. If I had no other option but foreclosure, will the lender have any recourse or will I be protected under california law? I just want to ensure if I foreclose in a non-judical way that I am safe from anyone coming after me for the remainder.

Asked on May 29, 2009 under Real Estate Law, California


MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 14 years ago | Contributor

It depends.  Anyone can sue for the deficiency.  The advice you seek must be determined based on a number of factors, including what you mean by if you foreclose.  You don't foreclose, you are foreclosed on. 

Anti-deficiency laws only really kick in on a purchase money loan, not on a refinance.  The fact you have have a second loan may make the anti-deficiency law null and void for you, so you can be sued for the deficiency.


You may have other options, like modification/workout or deed in lieu.

Contact the following:

1. California Dept of Financial Institutions

2. A California Real Estate/Bankruptcy Attorney.  Try www.attorneypages.com and then check his or her disciplinary record under attorney search at www.calbar.ca.gov.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption