In Coker v. JP Morgan Chase Bank, N.A, the Supreme Court today extends the reach of a statute that prevents a foreclosing bank from recovering more than the proceeds of the foreclosure sale. The court’s unanimous opinion, written by Justice Goodwin Liu, concludes that the statute also offers similar protection to a homeowner who, with the bank’s agreement, engineers a short sale, i.e., a sale for an amount less than the outstanding loan balance. The court also holds invalid a waiver by the short-selling homeowner of the statute’s protection.
Actually, the court doesn’t extend the statute; according to the opinion, the Legislature already did that in 2012. What the court does today is interpret the statutory scheme as it read before the 2012 amendment.
The court affirms the Fourth District, Division One, Court of Appeal.
