Sep
6
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So Califonria -Bank of America – Mortgage Foreclosures?
How does Bank of America foreclose on their mortgage loans? Will they pursue a Deficiency Judgement on their mortgage and HELOC? I know each bank at each state does differently. Will Southern California BOA go after home owner? Does the “one-action” rule mean the California Banks can only choose one action over another by either Foreclosue the property and take whatever the proceed (which may be less than the loan amount )or take a Deficiency Judgement against the home owner?
Both judicial and non-judicial foreclosure are available, but the non-judicial deed of trust sale is overwhelmingly preferred.
California has a one-action rule, in which a lender must elect one action to take against the borrower if the borrower defaults. If the lender forecloses the deed of trust out of court, the lender has chosen one action and may not bring a lawsuit to recover a deficiency, which would be a second action. If the lender chooses to sue the borrower and obtain both a foreclosure order, and if the proceeds of the judicial sale of the real estate are not sufficient to repay the loan balance, then a deficiency for the balance is allowed. Such a suit is permitted as the lender’s one action.
California lenders rarely elect judicial foreclosures.
Debtors may reinstate up to five days before non-judicial foreclosure sale.
No deficiency judgment is permitted after a non-judicial foreclosure or for a foreclosure on a purchase money loan. If the foreclosure is judicial, a deficiency judgment is allowed if the foreclosure was not a purchase money loan. California’s one-action rule requires the lender to foreclosure and sues for a deficiency at the same time. If the lender elects to foreclose only, it can’t elect to sue for a deficiency later on.
While you may be safe from deficiency judgement on the primary loan, they could seek deficiency judgement on the HELOC. It would depend on if both are foreclosed in one action.
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