Bill Text: CA SB426 | 2013-2014 | Regular Session | Chaptered
Bill Title: Civil procedure: deficiency judgments.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2013-07-11 - Chaptered by Secretary of State. Chapter 65, Statutes of 2013. [SB426 Detail]
Download: California-2013-SB426-Chaptered.html
BILL NUMBER: SB 426 CHAPTERED
BILL TEXT
CHAPTER 65
FILED WITH SECRETARY OF STATE JULY 11, 2013
APPROVED BY GOVERNOR JULY 11, 2013
PASSED THE SENATE JULY 1, 2013
PASSED THE ASSEMBLY JUNE 24, 2013
AMENDED IN ASSEMBLY JUNE 11, 2013
AMENDED IN SENATE APRIL 1, 2013
INTRODUCED BY Senator Corbett
FEBRUARY 21, 2013
An act to amend Sections 580b and 580d of the Code of Civil
Procedure, relating to deficiency judgments.
LEGISLATIVE COUNSEL'S DIGEST
SB 426, 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. The bill also would express the intent of the Legislature
that these provisions would not impact existing law regarding the
liability of a guarantor, pledgor, or other surety with respect to a
deficiency, nor existing law regarding other collateral pledged to
secure the obligation that is the subject of a deficiency.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares that this measure is
not intended to and does not impact existing law regarding the
liability a guarantor, pledgor or other surety may have with respect
to a deficiency, nor does it impact existing law regarding other
collateral pledged to secure an obligation that is the subject of a
deficiency.
SEC. 2. Section 580b of the Code of Civil Procedure is amended to
read:
580b. (a) Except as provided in subdivision (c), no deficiency
shall be owed or collected, and no deficiency judgment shall lie, for
any of the following:
(1) 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.
(2) Under a deed of trust or mortgage given to the vendor to
secure payment of the balance of the purchase price of that real
property or estate for years therein.
(3) Under a deed of trust or mortgage on a dwelling for not more
than four families given to a lender to secure repayment of a loan
that was used to pay all or part of the purchase price of that
dwelling, occupied entirely or in part by the purchaser. For purposes
of subdivision (b), a loan described in this paragraph is a
"purchase money loan."
(b) No deficiency shall be owed or collected, and no deficiency
judgment shall lie, on a loan, refinance, or other credit transaction
(collectively, a "credit transaction") that is used to refinance a
purchase money loan, or subsequent refinances of a purchase money
loan, except to the extent that in a credit transaction the lender or
creditor advances new principal (hereafter "new advance") that is
not applied to an obligation owed or to be owed under the purchase
money loan, or to fees, costs, or related expenses of the credit
transaction. A new credit transaction shall be deemed to be a
purchase money loan except as to the principal amount of a new
advance. For purposes of this section, any payment of principal shall
be deemed to be applied first to the principal balance of the
purchase money loan, and then to the principal balance of a new
advance, and interest payments shall be applied to any interest due
and owing. This subdivision applies only to credit transactions that
are executed on or after January 1, 2013.
(c) The fact that no deficiency shall be owed or collected under
the circumstances set forth in subdivisions (a) and (b) does not
affect the liability that a guarantor, pledgor or other surety might
otherwise have with respect to the deficiency, or that might
otherwise be satisfied in whole or in part from other collateral
pledged to secure the obligation that is the subject of the
deficiency.
(d) When both a chattel mortgage and a deed of trust or mortgage
have been given to secure payment of the balance of the combined
purchase price of both real and personal property, no deficiency
judgment shall lie under any one thereof if no deficiency judgment
would lie under the deed of trust or mortgage on the real property or
estate for years therein.
SEC. 3. Section 580d of the Code of Civil Procedure is amended to
read:
580d. (a) Except as provided in subdivision (b), no deficiency
shall be owed or collected, and no deficiency judgment shall 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 executed in
any case in which the real property or estate for years therein has
been sold by the mortgagee or trustee under power of sale contained
in the mortgage or deed of trust.
(b) The fact that no deficiency shall be owed or collected under
the circumstances set forth in subdivision (a) does not affect the
liability that a guarantor, pledgor or other surety might otherwise
have with respect to the deficiency, or that might otherwise be
satisfied in whole or in part from other collateral pledged to secure
the obligation that is the subject of the deficiency.
(c) This section does not apply to a deed of trust, mortgage, or
other lien given to secure the payment of bonds or other evidences of
indebtedness authorized or permitted to be issued by the
Commissioner of Corporations, or which is made by a public utility
subject to the Public Utilities Act (Part 1 (commencing with Section
201) of Division 1 of the Public Utilities Code).
