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legalgems, Arbitrator
Category: Real Estate Law
Satisfied Customers: 7084
Experience:  Just Answer consultant at Self employed
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It is regarding a mortgage deficiency lawsuit that was filed

Customer Question

It is regarding a mortgage deficiency lawsuit that was filed against me.
JA: Because laws vary from place to place, can you tell me what state this is in?
Customer: California
JA: Has any paperwork been filed?
Customer: Yes, I was sued (but not personally served). I got the lawsuit in the mail, and I didn't respond by the due date and now there is a pending default judgement requested.
JA: Anything else you want the lawyer to know before I connect you?
Customer: No
Submitted: 25 days ago.
Category: Real Estate Law
Expert:  legalgems replied 25 days ago.

Hello! I will be reviewing your question and posting a response momentarily; if you have any follow up questions please respond here. Thanks!

Customer: replied 25 days ago.
I just uploaded the related files to this questions.
Expert:  legalgems replied 25 days ago.

I'm sorry to hear this; CA has statutes that address this codified at Code of Civil Procedure section 580.

Those codes are here

Basically, money purchase loans (money used to purchase a residence) are anti deficiency, meaning the lender cannot sue the homeowner for money still owing after foreclosure; in contrast, a line of equity allows for the lender to seek a deficiency judgment.

If the party does not contest the lawsuit, the court will assume it is not being contested, and will issue a default judgment. The requesting party will need to show that the person was served,or that service was by publication (newspaper). If they can prove that then the court will issue a default judgment. If service was not proper, the party can dispute that by filing a motion to quash service and challenging the request for default on that premise.

If there is no grounds for challenging the underlying judgment, most people will not dispute it, because the court can add on the legal fees incurred by the lender, and so the consumer would ultimately be the one paying those fees.

Further questions? Please post here to continue the chat. Satisfied? Kindly rate positively so I receive credit for assisting you. I hope that you feel I have earned 5 stars *****as I strive to provide my customers with great service.(no additional charges are incurred). Information provided is for educational purposes only. Consultation with a personal attorney is always recommended so your particular facts may be considered. Thank you and take care.
Customer: replied 25 days ago.
What are my option at this point?
Expert:  legalgems replied 25 days ago.

There are a few options:

1. challenge the default judgment by filing a motion to quash service due to defective service (not being served) and responding to the request for default, letting the court know your side

2. contacting the lender to reach a settlement so legal fees do not continue to accrue.

#1 is rather detailed and will likely require an attorney (or many hours of research) to draft the motion, the legal brief and the declarations in support of the motion. Some attorneys work on a limited scope basis which allows the client to prepare the paperwork, and the attorney provides the research, court appearance, etc.

Customer: replied 25 days ago.
If I file Bankruptcy will this go away?
Expert:  legalgems replied 25 days ago.

Filing bankruptcy will place a stay on any pending court proceedings; this is effective as soon as the petition is filed.

The judgment will always exist, as that is an official document; but the underlying debt could be wiped out (typically this is the case in Chapter 7)

Expert:  legalgems replied 23 days ago.

Hello again; just checking in to see how things worked out;
if you have further questions please don't hesitate to reach out to me here on Just Answer.