BILL NUMBER: SB 931	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MARCH 25, 2010
	AMENDED IN SENATE  MARCH 15, 2010

INTRODUCED BY   Senator Ducheny

                        FEBRUARY 2, 2010

   An act to add Section 580e to the Code of Civil Procedure,
relating to mortgages.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 931, as amended, Ducheny. Mortgages: deficiency judgments.
   Existing law authorizes an action for a deficiency judgment for
the balance due upon an obligation for the payment of which a deed of
trust or mortgage with power of sale upon real property or any
interest therein was given as security, as specified. Existing law
prohibits a deficiency judgment in any case in which the real
property or an estate for years therein has been sold by the
mortgagee or trustee under power of sale contained in the mortgage or
deed of trust.
   This bill would prohibit a deficiency judgment under a note
secured by a first deed of trust or first mortgage for a dwelling of
not more than 4 units in any case in which the trustor or mortgagor
sells the dwelling for less than the remaining amount of the
indebtedness due at the time of sale with the written consent of the
holder of the first deed of trust or first mortgage. The bill would
provide that written consent of the holder of the first deed of trust
or first mortgage to that sale shall obligate that holder to accept
the sale proceeds as full payment and to fully discharge the
remaining amount of the indebtedness on the first deed of trust or
first mortgage.  The bill would specify that those provisions
would not limit the ability of the holder of the first deed of trust
or first mortgage to seek damages and use existing rights and
remedies against the trustor or mortgagor or any 3rd party for fraud
or waste if the trustor or mortgagor commits either fraud with
respect to the sale of, or waste with respect to, the real property
that secures that deed of trust or mortgage. 
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 580e is added to the Code of Civil Procedure,
to read:
   580e.   (a)    No judgment shall be rendered for
any deficiency under a note secured by a first deed of trust or
first mortgage for a dwelling of not more than four units, in any
case in which the trustor or mortgagor sells the dwelling for less
than the remaining amount of the indebtedness due at the time of sale
with the written consent of the holder of the first deed of trust or
first mortgage. Written consent of the holder of the first deed of
trust or first mortgage to that sale shall obligate that holder to
accept the sale proceeds as full payment and to fully discharge the
remaining amount of the indebtedness on the first deed of trust or
first mortgage. 
   (b) If the trustor or mortgagor commits either fraud with respect
to the sale of, or waste with respect to, the real property that
secures the first deed of trust or first mortgage, this section shall
not limit the ability of the holder of the first deed of trust or
first mortgage to seek damages and use existing rights and remedies
against the trustor or mortgagor or any third party for fraud or
waste.