Full question:
My son's house went into foreclosure and was a trustee sale, it was sold for 50% less than they paid -does this mean they are no longer responsible for any monies owing on this house. We are told in California once it is sold by trustee sale all monies owed on this property is wiped clear and final, they do have a document that says in part 'is to terminate any oral or written agreement you may have on said property'.
- Category: Real Property
- Subcategory: Foreclosure
- Date:
- State: California
Answer:
A trustee sale occurs when a property is sold due to foreclosure, typically because the borrower has defaulted on their loan. In California, once a property is sold at a trustee sale, the borrower is generally no longer responsible for any remaining debts associated with that property. This is supported by California's anti-deficiency laws, which prevent lenders from seeking a deficiency judgment after a foreclosure sale if the mortgage was used to purchase the property and it was a primary residence.
Specifically, California Civil Procedure Code § 580b states that no deficiency judgment can be sought after the sale of a dwelling occupied by the purchaser, as long as the loan was used to pay all or part of the purchase price. This means that if your son's house was sold at a trustee sale, and it was a purchase money mortgage for his primary residence, he should not be liable for any remaining balance on the mortgage.
However, this law does not apply to second mortgages or home equity loans. If your son has any other financing arrangements related to the property, those may still be enforceable. It's advisable to consult with a legal professional for specific guidance based on the details of his situation.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.