• Land Use Attorney Capitola

Posts Tagged ‘judicial foreclosure’

CASE UPDATE: Deficiency Judgment Not Allowed Because Bank Failed To Include All Properties Securing Loan In Judicial Foreclosure Sale.

In First California Bank v. McDonald, (2014) 2014 WL 6675937, the court held that a bank/ secured lender could not maintain an action for a deficiency judgment because in the underlying judicial foreclosure action the bank only included one of two properties securing the loan.

The bank made the subject loan to a husband and wife secured by two properties, the “Wasco” property, which was community property, and the “Shafter” property, which was the wife’s sole and separate property. After the husband died, the loan went into default.  The bank and the wife agreed to a private sale of the parcel that was her separate property (Shafter), and then the bank filed a lawsuit to foreclose on the remaining parcel and obtain a deficiency judgment.  The trial court granted a decree of judicial foreclosure stating that the bank was entitled to obtain a deficiency judgment against the representatives of the husband’s estate, but the court of appeal reversed. 

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Miles J. Dolinger
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