Existing law provides that a deficiency judgment following a judicial foreclosure is not permitted with respect to a deed of trust or mortgage given to the seller to secure payment of the balance of the purchase price of real property, or under a deed of trust or mortgage on a dwelling to secure repayment of a purchase money loan which was used to pay all or part of the purchase price of that dwelling. This legislation additionally provides that no deficiency judgment is permitted on any loan, refinance, or other credit transaction that is used to refinance a purchase money loan (as defined), or subsequent refinances of a purchase money loan, except to the extent that the lender advances new principal which is not applied to any obligation owed or to be owed under the purchase money loan, or to fees, costs, or related expenses of the refinance. The bill’s provisions only apply to a loan, refinance, or other credit transaction used to refinance a purchase money loan which is executed on or after January 1, 2013.
Enacted July 2012. Link to bill: http://www.leginfo.ca.gov/pub/11-12/bill/sen/sb_1051-1100/sb_1069_bill_20120709_chaptered.pdf