California foreclosre recourse
Submitted by mvmidtown on Tue, 08/19/2008 - 8:44am.
Hello all. I am new to this forum so forgive me if this question has been asked already. My wife and I live in CA. We are in the process of foreclosing on our property and we had a couple of questions for you attorneys/realtors. We have a 1st & 2nd both PURCHASE MONEY LOANS, BOTH WITH THE SAME LENDER, and we have NEVER refi'd the property. Our question is, once the 1st has foreclosed and used there "1 option", can the 2nd come after us for a defiency judgement? I am looking for answers from people who have gone through this or from people/attorneys who have had 1st hand experience in dealing with this. Your help on this is greatly appriciated.
Comments:
No, lenders can not pursue a deficiency judgement on a purchase money loan in CA even if they have not used their "one action". Note that they may have other remedies available to them. For example they could pursue you for fraud if you lied on your loan application. Given the prevelance of stated income loans in CA we may see this emerge as a common practice as lenders look to recoup losses. Given the consequences it certainly wouldn't hurt to reach out to a good attorney - which I am not.
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