The simplest and most far-reaching aspect of the Anti –Deficiency Laws is CCP 580d. It provides that, if a lender forecloses upon a mortgage or a deed of trust, via a non-judicial foreclosure, it cannot recover a deficiency judgment. The rule could hardly be simpler; if a lender wants a deficiency judgment, it must foreclose judicially.

There are exceptions to this rule. As with CCP 580b, the lender may sue the borrower for fraud in persuading the lender to make the loan in the first instance. Further, the lender may sue the borrower for “waste” for damaging the collateral. Romo v. Stewart Title of California (1995) 35 Cal. App. 4th 1609. In both cases, however, the lender cannot sue, if it makes a full-credit bid at the non-judicial foreclosure sale. If it makes a full-credit bid, the lender is considered fully paid, so it cannot sue under any other theories. Kolodge v. Boyd (2001) 88 Cal. App. 4th 349.

Further, 580d only prevents a lender from suing the borrower for a deficiency judgment after a non-judicial foreclosure. 580d does not prevent a lender from foreclosing upon other collateral which it may hold for the same debt. Romo v. Stewart Title of California (1995) 35 Cal. App. 4th 1609; MDFC Loan Corp. v. Greenbrier Plaza Partners (1994) 21 Cal. App. 4th 1045. The legal theory of this is that, while 580d cuts off any personal liability of the borrower for a deficiency, 580d does not release liens against other property.