Calif. Court Shields Short Sellers From Deficiency Judgments

Law360, Los Angeles (July 24, 2013, 6:18 PM EDT) -- In a case of first impression, a California appeals court said Tuesday that borrowers who sell a property for less than the outstanding mortgage balance owed to the lender are protected under California state law from having to pay the remaining balance after the sale.

A three-judge panel for California's Fourth Appellate District ruled Tuesday that a state court erred in dismissing Carol Coker's complaint for declaratory relief against her lender, a subsidiary of JPMorgan Chase Bank N.A. Coker filed the complaint after Chase tried to collect the remaining balance on her mortgage loan following the...
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