What must occur for a purchase money second trust deed to allow a deficiency judgment?

For a purchase money second trust deed to allow a deficiency judgment, it must be paid in full. A deficiency judgment can occur when the amount received from the sale of the property is less than the outstanding balance of the loan after foreclosure. However, in the case of a purchase money second trust deed, if the loan is satisfied in full, it solidifies the position of the lender regarding any remaining amounts owed, which may lead to pursuing a deficiency judgment if necessary.

This situation is nuanced by the nature of purchase money mortgages, where these loans are often tied to the financing of the property being purchased. By fulfilling the loan obligation completely, the lender retains the right to seek redress through a deficiency judgment if the property's sale proceeds do not cover the total owed when default occurs.