When a borrower defaults on payment of a loan that is secured by a deed of trust on real property and sells the property for less money than the debtor owed, can the creditor seek a deficiency judgment against the debtor for the balance of the debt?
California, United States of America
The following excerpt is from Western Sec. Bank, N.A. v. Beverly Hills Business Bank, 16 Cal.App.4th 974, 20 Cal.Rptr.2d 318 (Cal. App. 1993):
Under section 580d, when a debtor defaults on payment of a loan that is secured by a deed of trust on real property and the creditor then sells the property for less money than the debtor owed, the creditor may seek a deficiency judgment against the debtor for the balance of the debt if the creditor has foreclosed judicially but not if the foreclosure was by nonjudicial means. (Union Bank v. Gradsky (1968) 265 Cal.App.2d 40, 43, 71 Cal.Rptr. 64.)
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