My question involves a foreclosure in the State of CA. The situation I am dealing with is if a lender in 2nd lien position with a HELOC charges off a HELOC prior to a foreclosure initiated by the 1st lienholder, does the charge-off affect the 2nd lienholder's ability to obtain a deficiency judgment?
I believe I already know the answer to this - that the charge-off is only an accounting/taxation issue for the lienholder and it has no impact on the lienholder's ability to enforce/collect the debt nor its ability to obtain the deficiency judgment.
The question I cannot find any answer to is can anyone point me in the direction of a statute or case law that supports that a charge-off does not preclude a lender's ability to collect on the debt??
Thank you in advance for any help!