[ManAtMurrieta]

Hello, We bought our home in Califonia back on 2005 for 365K with a 1st and a 2nd. We refinanced on 2007 for a better rate but did not cash out any equity. I understand this action made this a "Recourse Loan" on both the 1st and 2nd. Our current situation caused us to fall behind and now we are looking into a non-judicial foreclosure on the 1st mortgage. When this non-judicial foreclosure is completed. Can the banks pursue difficiency judgement on the 1st mortgage? I understand the 2nd probably will but I'm more concerned about the 1st. I've been reading a lot about Califonia's "One Action Rule" but an attorney lead me to believe that rule only applies to "non-recourse Loans" because they have "anti-difficiency" protection. Is there any truth to that? If the 1st mortgage chooses the "non-judicial" routh doesn't that in turn make it a "Non-Recourse Loan"?

[solara]

Yeah, find yourself another lawyer. The One Action Rule does apply here whether the loan was non-recourse or recourse. If the lender executed a non-judicial foreclosure, then they cannot seek a deficiency judgment.

Btw, a non-judicial foreclosure does not change the nature of the mortgage - all it does in California's case is to prevent a deficiency judgment if any.