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No, the lienholder cannot pursue you or your other property. California is a non-deficiency state. Under CA’s statute, deficiency judgments cannot be entered for foreclosures by private sale or on purchase money mortgages. A lender cannot get a deficiency judgment if it forecloses by private sale or if the underlying loan was a purchase-money loan. In other words, if you obtained a mortgage to purchase a home in California, you have no personal liability for any amount remaining unpaid after a foreclosure sale. That keeps your other assets safe.
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Thanks for following up. It depends. If it was refinanced on or after January 1, 2013 the lender would not be able to get a deficiency judgment as long as you didn't take refinance for more than the original loan. Even then, it's still not likely the lender would pursue a deficiency. The reason is that CA is a single-action state meaning that in order to pursue this the lender would have to pursue a judicial foreclosure. The reality is that though they could legally pursue you for the shortfall, lenders do not pursue foreclosures in this manner; rather, to save the time and expense, almost all lenders pursue a non-judicial foreclosure by simply pursuing foreclosure under their deed of trust giving them the lien rather than going through the courts. The second mortgage doesn't apply and the lender could pursue you for this. I'm sorry!
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