Antideficiency legislation means legislation enacted to provide revenue to blanket a budget deficiency. It means legislation enacted to control the rights of secured creditors to recover in excess of the security. The purpose of the antideficiency legislation was to protect debtors in certain situations from personal liability for large deficiency judgments after their property had been taken by the creditor through foreclosure proceedings. It therefore prevents the aggravation of the economic downturn which would result if defaulting purchasers lost their land and in addition were burdened with personal liability.
In Cadle Co. II v. Harvey, 83 Cal. App. 4th 927 (Cal. Ct. App. 2000), the court observed that “The antideficiency laws embodied in Cal. Civ. Proc. Code §§ 580a- 580d, 726 reflect a legislative policy that strictly limits the right to recover deficiency judgments for the amount the debt exceeds the value of the security. The debtor cannot be compelled to waive the antideficiency protections in advance because the antideficiency legislation was established for a public reason and cannot be contravened by a private agreement.” The court further observed that “The protections afforded to debtors under the antideficiency legislation do not directly protect guarantors from liability for deficiency judgments. Accordingly, if a guarantor expressly waives the protections of the antideficiency laws, a lender may recover the deficiency judgment against the guarantor even though the antideficiency laws would bar the lender from collecting that same deficiency from the primary obligor.”