Industry NewsMortgage

California may restrict lender claims over refis

Realtors fear homebuyer pool will shrink under current law
Published on Jun 22, 2010

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by CareyBot

California lawmakers are weighing legislation that would provide some protection from deficiency judgments for borrowers who refinanced their mortgages.

California already prohibits lenders from pursuing deficiency judgments against homeowners who default on their original purchase mortgage. Lenders can foreclose on the borrower's home and attempt to recoup their losses by selling the property securing the loan. But if the sale doesn't cover the amount owed, lenders can't go to court to force borrowers to make up the difference.