SB 426, as introduced, Corbett. Civil procedure: deficiency judgments.
Existing law provides that no deficiency judgment shall lie following a judicial foreclosure with respect to certain enumerated circumstances, including, among others, after a sale of real property or an estate for years therein for failure of the purchaser to complete his or her contract of sale. Existing law prohibits a judgment to be rendered for a deficiency on a note secured by a deed of trust or mortgage on real property or an estate for years therein, as specified.
This bill would prohibit a deficiency from being owed or collected following a judicial foreclosure with respect to the enumerated circumstances. The bill also would prohibit a deficiency from being owed or collected for a deficiency on a note secured by a deed of trust or mortgage on real property or an estate for years therein, as specified, and would make nonsubstantive changes to these provisions.
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 580b of the Code of Civil Procedure is
2amended to read:
(a) No deficiency judgment shall lie
begin delete in any eventend delete for the following:
3(1) After a sale of real property or an estate for years therein
4for failure of the purchaser to complete his or her contract of sale.
5(2) Under a deed of trust or mortgage given to the vendor to
6secure payment of the balance of the purchase price of that real
7property or estate for years therein.
8(3) Under a deed of trust or mortgage on a dwelling for not more
9than four families given to a lender to secure repayment of a loan
begin delete whichend delete was begin delete in factend delete used to pay all or part of the purchase price
11of that dwelling, occupied entirely or in part by the purchaser.
begin delete(b)end delete begin delete end deleteFor purposes of subdivision begin delete (c),end delete a loan described in
begin delete (3) of subdivision (a)end delete is a “purchase money loan.”
15 No deficiency judgment shall lie
begin delete in any eventend delete on begin delete anyend delete
16refinance, or other credit transaction (collectively, a “credit
begin delete whichend delete is used to refinance a purchase money
18loan, or subsequent refinances of a purchase money loan, except
19to the extent that in a credit transaction
begin delete,end delete the lender or creditor
20advances new principal (hereafter “new advance”)
begin delete whichend delete is
21not applied to
begin delete anyend delete
obligation owed or to be owed under the
22purchase money loan, or to fees, costs, or related expenses of the
begin delete Anyend delete new credit transaction shall be deemed
24to be a purchase money loan except as to the principal amount of
begin delete anyend delete new advance. For purposes of this section, any payment of
26principal shall be deemed to be applied first to the principal balance
27of the purchase money loan, and then to the principal balance of
begin delete anyend delete new
advance, and interest payments shall be applied to any
29interest due and owing.
begin delete The provisions of thisend delete subdivision
begin delete shallend delete only begin delete applyend delete to credit transactions that are executed on
31or after January 1, 2013.
32(d) Whereend delete
33 both a chattel mortgage and a deed of trust or mortgage
34have been given to secure payment of the balance of the combined
35purchase price of both real and personal property, no deficiency
36judgment shall lie
begin delete at any timeend delete under any one thereof if no
37deficiency judgment would lie under the deed of trust or mortgage
38on the real property or estate for years therein.
Section 580d of the Code of Civil Procedure is
40amended to read:
begin deleteNo end delete judgment shall be rendered for begin delete anyend delete deficiency begin delete uponend delete
3 a note secured by a deed of trust or mortgage
begin delete uponend delete real
4property or an estate for years therein
begin delete hereafterend delete executed in any
5case in which the real property or estate for years therein has been
6sold by the mortgagee or trustee under power of sale contained in
7the mortgage or deed of trust.
9section does not apply to
begin delete anyend delete
deed of trust, begin delete mortgageend delete
10 or other lien given to secure the payment of bonds or
11other evidences of indebtedness authorized or permitted to be
12issued by the Commissioner of Corporations, or which is made by
13a public utility subject to the Public Utilities Act (Part 1
14(commencing with Section 201) of Division 1 of the Public Utilities