I am sure some of our CA attorneys will respond to this. I believe I saw responses on this topic previously that indicated that CA law prohibited deficiency judgments against consumers arising from mortgage foreclosures on their primary residences. Unfortunately, that is not the case in many states, and most definitely is not the case in Florida, where I am practicing and defending people against foreclosure. Florida law has no similar provisions. While Florida protects homestead from claims of all but purchase money lenders and taxes, it leaves foreclosed-upon homeowners completely exposed for deficiency judgments arising from foreclousre, and in many cases to wage garnisment amd asset execution.
Please note that I do not practice in CA and the above is niot intended as CA legal advice.
1. Ca homeowners may ONLY be sued by lender to obtain a personal liabiltiy judgment in a judicial foreclosure process. Calif. also has a non-judicial foreclosure process but the lender gives up any claim for personal liability against the borrower/homeowner. If there is no personal liability judgment, then the lender cannot garnish wages or repo cars. Set forth within the Civil Code of Procedure, Sections 580a through 580d, the "anti-deficiency" laws, prohibit secured lenders, under certain circumstances, from pursuing the borrower for the unpaid balance when the proceeds from a foreclosure sale do not fully pay the amount of the borrower's secured debt. In other words, when the "anti-deficiency" laws apply to homeowner/borrowers, lenders will be barred, generally, from pursuing the borrowers, personally, for any excess amount of the secured debt left unpaid after a foreclosure sale (the "deficiency"). There is possibility, though remote, that lenders that have refinanced the original money purchase loans could seek personal liability against homeowners in a judicial foreclosure but that is very rare and unusual circumstances would be present.
2. President Bush Signed H.R. 3648, the Mortgage Forgiveness Debt Relief Act of 2007 ...that eliminates the income tax liability for homeowners for the next 3 years where banks refinance for less that owed or short sales or foreclosures.