Protection from owing more after a trustee sale (anti-deficiency)
Cal. Code Civ. Proc. § 580d(a)
In plain words
After a nonjudicial trustee sale in California, the lender cannot collect the difference between the sale price and what you owed. Separate rules also protect many purchase loans on homes of up to four units that the buyer lives in.
Who is protected
California borrowers after a trustee sale, and many owner-occupant purchase-money borrowers.
When it applies
- Only in California.
What you can do
Ask in writing
If a collector asks for a “deficiency” after a trustee sale, write back citing Code of Civil Procedure § 580d and ask them to stop.
Open the toolRead the California guide
Our California page explains the whole process step by step, with its sources and free local help.
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Honest limits
- After a judicial foreclosure of a loan that is not a protected purchase loan, a deficiency may still be possible (limited to fair value).
- A second loan may have different rules; check whether it was used to buy the home.
- This is general education, not legal advice. Laws change and details depend on your papers and your court; check the current law or ask a lawyer or legal aid.
The law
- State lawNo deficiency after power-of-sale
Cal. Code Civ. Proc. § 580d(a)
Exact part: (a)
What it says: No deficiency may be owed or collected on a note secured by a deed of trust after a sale under the power of sale.
Read the official texthttps://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CCP§ionNum=580d - State lawPurchase-money anti-deficiency
Cal. Code Civ. Proc. § 580b(a)(3)
Exact part: (a)(3)
What it says: No deficiency on many purchase loans for an owner-occupied dwelling of up to four units.
Read the official texthttps://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CCP§ionNum=580b
Court cases
- Homeowner wonSame topicYvanova v. New Century Mortgage Corp.
Yvanova v. New Century Mortg. Corp., 62 Cal. 4th 919 (2016)
a borrower may bring a post-sale wrongful-foreclosure claim by alleging that the assignment to the foreclosing party was void
- Homeowner wonSame topicJerman v. Carlisle, McNellie, Rini, Kramer & Ulrich, L.P.A.
Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich, L.P.A., 559 U.S. 573 (2010)
the FDCPA's bona fide error defense does not excuse a debt collector's incorrect interpretation of what the Act requires
- Homeowner wonSame topicKaltenbach v. Richards
Kaltenbach v. Richards, 464 F.3d 524 (5th Cir. 2006)
a person who meets the FDCPA's general definition of debt collector is subject to the whole Act even while enforcing a security interest
- Homeowner wonSame topicHeintz v. Jenkins
Heintz v. Jenkins, 514 U.S. 291 (1995)
the FDCPA applies to lawyers who regularly collect consumer debts, even through litigation
- Homeowner lostSame topicObduskey v. McCarthy & Holthus LLP
Obduskey v. McCarthy & Holthus LLP, 586 U.S. 466 (2019)
a business engaged only in non-judicial foreclosure is not a debt collector under the FDCPA, apart from the provision barring threats to take property without a present right
- Homeowner lostSame topicMidland Funding, LLC v. Johnson
Midland Funding, LLC v. Johnson, 581 U.S. 224 (2017)
filing an obviously time-barred proof of claim in bankruptcy does not violate the FDCPA
Related rights
Right to leftover money (surplus) after a trustee sale
Cal. Civ. Code § 2924k(a)(4)
If a trustee sale brings in more than the loan, costs and junior liens, the rest goes to you, the former owner. The trustee pays the costs, the foreclosing loan and then junior liens first. You usually must file a claim with the trustee to get the money.
Read this rightRight to redeem after a court (judicial) foreclosure sale
Cal. Code Civ. Proc. § 729.030(a)–(b)
If your California home is sold through a court (judicial) foreclosure, you may be able to buy it back after the sale. The period is three months if the sale paid the whole debt, or one year if it did not. There is no redemption after a regular trustee (nonjudicial) sale.
Read this rightAfter a discharge, creditors cannot collect the wiped-out debt from you
11 U.S.C. § 524(a)(2)
A bankruptcy discharge wipes out your personal liability for most debts in the case. After that, the law forbids creditors from suing, calling or otherwise trying to collect a discharged debt from you personally. A court can hold a creditor in contempt if there was no fair doubt that its conduct was barred.
Read this rightThe government cannot keep your home equity beyond the tax debt
U.S. Const. amend. VTakings Clause
If your home is taken or sold to pay property taxes, the government may collect what you owe, but it may not keep the extra value. Keeping the surplus is a "taking" of your property without just compensation, which the Fifth Amendment forbids (Tyler v. Hennepin County, 2023). You may be able to claim the surplus, but you usually must follow your state's claim process and deadlines.
Read this rightA collection or charge-off must carry its real delinquency date
15 U.S.C. § 1681s-2(a)(5)(A)
A company that reports an account placed for collection or charged off must tell the credit bureau the month and year the delinquency began, within 90 days. That date sets when the item must come off your report, and it does not change when the debt is sold.
Read this rightMake the company that reported the error investigate it
15 U.S.C. § 1681s-2(b)(1)
The company that reported the information — such as your servicer — must investigate when a credit bureau passes along your dispute, and fix what is wrong with every bureau. In many cases you can also dispute directly with that company, which must then investigate and report back to you.
Read this right