Chase attempts to collect debt despite the law claiming it can’t

Different states have different laws regarding what happens to the remaining debt after a short-sale or foreclosure.  California (where this case hails from) has anti-deficiency statues that disallow a bank from trying to collect on this remaining debt.

Despite the law, Chase seems to have tried to do this anyway:

However, despite the California anti-deficiency statutes, which bar collection of a deficiency on purchase money mortgages after foreclosure, JP Morgan Chase attempted to collect nearly a $250,000 deficiency on the HELOC, and reported it negatively on the plaintiff’s consumer credit profile.

Chase lost the preliminary injunction hearing and the injunction was granted.  Chase is barred from providing derogatory information to the credit agencies for this statutorily collectible debt, pending the outcome of the case.  This case appears likely to provide an excellent legal precedent for others battling this same behavior.

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