LOS ANGELES, CA – May 19, 2010 – (RealEstateRama) — Facing the possibility of foreclosure, California homeowners may be hit with more than just losing their homes. Due to a loophole in state law, they also can be sued by their lender. For people who have refinanced a property, even if the money is used for home improvements, there is no protection should the borrower default on a mortgage that’s greater than the property’s value. Called a “deficiency” liability, under current California law, the lender can sue the former homeowner for the amount of the deficiency even after taking back the property
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