California Senate Bill SB426 Introduced / Bill

 BILL NUMBER: SB 426INTRODUCED BILL TEXT INTRODUCED BY Senator Corbett FEBRUARY 21, 2013 An act to amend Sections 580b and 580e of the Code of Civil Procedure, relating to deficiency judgments. LEGISLATIVE COUNSEL'S DIGEST SB 426, as introduced, 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. Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 580b of the Code of Civil Procedure is amended to read: 580b. (a) No deficiency  shall be owed or collected, and no deficiency  judgment shall lie  in any event  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  which   that  was  in fact  used to pay all or part of the purchase price of that dwelling, occupied entirely or in part by the purchaser.  (b)    For purposes of subdivision  (c),   (b),  a loan described in  this  paragraph  (3) of subdivision (a)  is a "purchase money loan."  (c)   (b)  No deficiency judgment shall lie  in any event  on  any   a  loan, refinance, or other credit transaction (collectively, a "credit transaction")  which   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")  which   that  is not applied to  any   an  obligation owed or to be owed under the purchase money loan, or to fees, costs, or related expenses of the credit transaction.  Any   A  new credit transaction shall be deemed to be a purchase money loan except as to the principal amount of  any   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  any   a  new advance, and interest payments shall be applied to any interest due and owing.  The provisions of this  This  subdivision  shall   applies  only  apply  to credit transactions that are executed on or after January 1, 2013.  (d) Where   (c)     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  at any time  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. 2. Section 580d of the Code of Civil Procedure is amended to read: 580d.  No   (a)     No deficiency shall be owed or collected, and no deficiency  judgment shall be rendered for  any   a  deficiency  upon   on  a note secured by a deed of trust or mortgage  upon   on  real property or an estate for years therein  hereafter  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.  This   (b)     This  section does not apply to  any   a  deed of trust,  mortgage   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).