Anti-Deficiency Protection for San Diego Refinance Loans
San Diego homeowners who default on their refinance loans are protected against personal liability for any deficiency following a San Diego foreclosure. Under existing anti-deficiency law, a San Diego borrower is protected from personal liability for a purchase money loan secured by an owner-occupied property with one-to-four residential units.
The new law extends that anti-deficiency protection to include any loan used to refinance the San Diego purchase money loan, plus any loan fees, costs, and related expenses for the refinance. The anti-deficiency protection, however, does not extend to any cash out in a refinance on San Diego real estate.
This new law only applies to refinance loans or other credit transactions used to refinance a purchase money loan, or subsequent refinances of a purchase money loan, that are executed on or after January 1, 2013.
For purposes of this law, any payment of principal shall be deemed to be applied first to the principal balance of the purchase money loan, and then to the principal balance of any new advance and interest payments shall be applied to any interest due and owing.
Senate Bill 1069 (codified as Cal. Code of Civ. Proc. § 580b(c)) (effective January 1, 2013).