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Kristine-CA
I have a different reading of 580 than you and some of the other consumer foreclosure advice sites on the internet. The foreclosure on the first did knock off the second lien from title, but it did not eliminate the note. BofA now owns an unsecured promissory note. To my knowledge that note is collect-able. The one-action rule applies to the lender who got back the property. They cannot sue on the def. or on the note because they took the property back as their "one-action". They are finished as their one action was the trustee's sale. But the second still owns a note that you signed, even though it is no longer secured by real property. As for the annoyance of collections, I suggest that you do not speak to them and ignore their mail. If they are going to sue you, you will be served. At that point you can decide to counter sue or file BK or whatever makes sense.
Does anyone here have case law or something I can read that says that the holder of the 2nd has no collection rights on the note after foreclosure on the 1st? Thanks, Kristine
CCP 580b: "No deficiency judgment shall lie in any event after a sale of
real property or an estate for years therein for failure of the
purchaser to complete his or her contract of sale, or under a deed of
trust or mortgage given to the vendor to secure payment of the
balance of the purchase price of that real property or estate for
years therein,
or under a deed of trust or mortgage on a dwelling for
not more than four families given to a lender to secure repayment of
a loan which was in fact used to pay all or part of the purchase
price of that dwelling occupied, entirely or in part, by the
purchaser."
CCP 580b is an anti-deficiency statute, and does not depend on the one action rule for its application.
If the borrower is really bent out of shape about an ignorant lender's attempts to aggressively collect on a debt barred by anti-deficiency statutes, he can try to find an attorney who will sue the lender under consumer statutes such as the Federal Fair Debt Collection practices act or California's Rosenthal act. There are consumer attorneys who will be happy to bring those kind of claims.
