Redingler v. Imperial Savings & Loan Assn

In Redingler v. Imperial Savings & Loan Assn. (1975) 47 Cal.App.3d 48, a bank was named as a loss payee on a fire insurance policy covering property that had been mortgaged by the plaintiff. The bank foreclosed on the property but recovered less than the amount due under the deed of trust. The court held that since the bank held the policy as security for the performance of the deed of trust and was named as a loss payee under the policy, the policy constituted additional security for the debt and receipt of the insurance proceeds was not prohibited by section 580b. "The debtor-creditor relationship between the parties was not totally extinguished during the foreclosure proceedings because the bank purchased the property for less than the amount of the balance due under the deed of trust . . . . The mortgagee was entitled to the insurance proceeds up to the amount of the indebtedness remaining after the foreclosure sale." ( Redingler, supra, 47 Cal.App.3d at p. 50.)