CCP 580 (d)
During my divorce I was unable to save my house and it was foreclosed on. My question is regaurding the second on the house. The company that held the second has been harassing me for four years via telephone, they even contacted my previous employer! I ran a credit check on myself, nothing from them except a credit check. I live in California, so I did a little research and it looks like under CCP 580 (d) they can not collect the deficiency. Is this true?
"The following information is provided as information only and in no way intended as legal advise. Therefore, one should seek legal advice from licensed counsel"
Newest case law on 580 violations.
Gilbert Dreyfuss et al. v. Union Bank of California
The borrower filed a complaint alleging that the lender had violated Section 580(d) of the Code of Civil Procedure (which precludes a deficiency judgment following a nonjudicial foreclosure) by making wrongful attempts to pursue a "deficiency" remaining from its foreclosure on the first deed of trust. The borrower further alleged that even if the lender's actions did not constitute an attempt to obtain a deficiency, it was still required to credit borrower with the "fair value" of the property subject to the first deed of trust pursuant to CCP Section 580(a) prior to seeking any of borrower's other assets. CCP Section 580(a) provides for a judicial determination of the fair market value of a foreclosed asset before entry of a deficiency judgment against a borrower.
In short, the borrower claimed that the lender was circumventing the policies underlying the antideficiency provisions of Section 580. The borrower claimed that the lender, rather than literally trying to enforce a deficiency judgment which it could not do under nonjudicial foreclosure methods, was in effect doing the same thing and violating Sections 580(a) and (d) by retaining an excess recovery at borrower's expense by bidding at the foreclosure sale far less than "fair market value" and less than the amount remaining outstanding on the loan in order to preserve its ability to foreclose on the additional deeds of trust. The borrower further claimed that it should receive the "fair value" protection provided by Section 580(a) because the purpose of Section 580(a) was to limit windfall recoveries by means other than classic deficiency money judgments. The borrower claimed that the failure to apply Section 580(a) to these circumstances would amount to a rejection of the spirit of California law.
The court resoundingly rejected the borrower's arguments. The court held that the lender did not seek to enforce a deficiency judgment, but merely foreclosed on each parcel of property securing the loan and was only required to credit the actual net sales proceeds (i.e., the amount of the lender's credit bid) from the sale of each property against the outstanding debt. Further, the fair value limitations do not apply unless the creditor seeks a deficiency judgment, which in this case it clearly did not.
A nonjudicial foreclosure existing law does not require a lender to credit the borrower with the fair market value of property when it successfully forecloses on multiple parcels of real property.
I suggest you review http://www.rutan.com/news/display.asp?NewsletterID=23
If you owe the funds, it is best to pay! A good property investor will be honest in his/her dealings.
Your time would be better spent working on a subject that would make you money and turn your financial life around.
Sorry for the tuff content of this, but it is best to correct financial problems and not spend time trying to avoid debt
Again sorry about the tuff content, it's called tuff love for a future investor.
Best of Luck
Jmichael