Can I be liable for a deficiency after foreclosure in California?

Anyone who owns a home should understand the laws of deficiency judgments in their state. A deficiency judgment is when a home owner is held liable for the amount owed on a mortgage (based on the home’s fair market value), even after a foreclosure takes place. So, what are the rules for deficiency judgments under California foreclosure laws?

• Contrary to popular belief, deficiency judgments don’t occur because of the amount left still to pay on the mortgage. They are related, instead, to a separate entity: a promissory note. 
• In some states, a mortgage contract includes a promissory note as well, which is a buyer’s promise to pay that’s entirely separate from the mortgage. In other words, foreclosure and surrender of the home and mortgage don’t clear up the amount owed from the promissory note.

In the state of California, the original mortgage on a home, even if a promissory note was included, cannot be subject to a deficiency judgment. In other words, the buyer cannot be held liable for the remaining balance on that original contract. If the buyer took out a second mortgage or another loan on the home also involving a promissory note, on the other hand, the situation isn’t quite so clear-cut; that loan can be subject to deficiency judgment collection laws. If you’re unsure where you stand on a mortgage default or a deficiency judgment situation, speak to a lawyer in your area as soon as possible to ensure your rights are protected.