Foreclosure in Los Angeles>Question Details

Agubri11, Home Owner in Los Angeles, CA

Afte a trustee sale can the second lien holder come after you?

Asked by Agubri11, Los Angeles, CA Tue Aug 14, 2012

My lender PennyMac (former CountryWide execs) have sold my home in a trustee sale. What happens with my second loan? The loans were used to purchase the home and it was my primary residence. I thought the lien was on the property and not on the person. Still having financial hardship and cannot pay 85K. Thanks in advance for all your answers. It is much appreciated.

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Pebble Singha ..’s answer
First of all I am so sorry to hear that you were foreclosed upon. I am wondering if you tried to do a short sale or not ? Short Sale would have been your best option.

Bankruptcy was another option for you to stop foreclosure if you qualified for it.

To answer your question YES the 2nd lien can come after you. More than likely they will sell your loan to another company and a collection agent might call you at any time within next 4 years. Again it is a hotly debated issue on whether they can or not. Some may tell you that no they cannot.
Contact an attorney for sure regarding you UNIQUE situation.

I also highly suggest that you talk to a Bankruptcy attorney and see if there is someting you can do about your debt.

I wish you luck.

8 out of 10 people in forclosure get foreclosed upon without any help or intervention: It is a statistic by CAR.
If you are behind on payments, get help . Get a CDPE to help you.
Pebble Singha
Director of Short Sales Keller Williams Realty Encino
2 votes Thank Flag Link Tue Aug 14, 2012
I think consulting an attornery is my next move. Thanks for your answer. I really appreciate all the advice.
Flag Tue Aug 14, 2012
California Law protect the Homeowners, to a great extent:
If the 2nd Lienholder really had a LIEN against the property; then it had to have been wiped out with the Foreclosure. The Foreclosure is finalized at the Trustee Sale.

The problems occur when the 2nd hadn't filed a LIEN, such as a Line of Credit.
Also, you could have a problem if the 2nd loan was not used to buy the house; such as using it to buy a boat or car, or pay off bills.

If you are past the Foreclosure, and the 2nd Holder is hasseling you, you may have to contact a Real Estate Attorney for clarification; take your paperwork with you.
It very well may be that they are going to try to bedevil you and browbeat you to give them some money, to which they have no right. Talk to the Attorney.

Good luck and may God bless
1 vote Thank Flag Link Tue Aug 14, 2012
Thanks for the sound advice. It is hard to know what the heck is going on. Seems like laws change from day to day and understanding some of the verbage they send you is difficult when you are not a trained attorney. Again, thanks for your advice.
Flag Tue Aug 14, 2012
You should check on your specific loan term... my understanding is that if it was Purchase Money Second (the reason for the second lien) then they do not have a deficiency claim after you.. but if it was not purchase money, like cash out.. then they do have the right of deficiency against you...

The lien gets wiped off, but that does not mean they have or do not have a deficiency claim against you. How they collect is another question all together...

I am sorry to hear about your situation... this is precisely why a short sale is a much preferred alternative.... I would not lose any sleep over it... because there is nothing you can do anyway... don't worry about things you cannot control...

Best of luck, and the worst is behind you with the foreclosure!

1 vote Thank Flag Link Tue Aug 14, 2012
Thank you. I appreciate your answer. I do feel alot better now that it is over with. :)
Flag Tue Aug 14, 2012
In a foreclosure in California the second is wiped out by the foreclosure. They may try to pester you for awhile. Just let them know you know your rights in California.
1 vote Thank Flag Link Tue Aug 14, 2012
I am real grateful for all the answers everyone is posting. Thanks!
Flag Tue Aug 14, 2012
No, second lien holder cannot come after you.
1 vote Thank Flag Link Tue Aug 14, 2012
Flag Tue Aug 14, 2012
Customarily the loan is secured by a lien against the property and is wiped out by the sale. Do you have online access or an automated number to phone and check the loan balance? Are you still in the property or have mail forwarded because you should have received notice. You can also run a free credit report to check.
1 vote Thank Flag Link Tue Aug 14, 2012
You have some time... they will assign an agent and then he or she will negotiate cash for keys with you... or maybe they will offer to lease it... or they may even re-sell it to another company... so just stay put and remember in business you don't get what is fair or right... you get what you negotiate. :)
Flag Wed Aug 15, 2012
I will go ahead and try and login to my Wells Fargo account. I am still in the property. Apparently the bank has purchased the home back. So, I will gamble and stay here as long as I can.
Flag Tue Aug 14, 2012
Thank you for your replies and remember to negotiate with whomever wants you to surrender occupancy. In business you do not get what is right or fair, you get what you negotiate. :)

Good luck!
0 votes Thank Flag Link Wed Aug 15, 2012
Wise advice. Thanks!
Flag Wed Aug 15, 2012
Purchase money loans for primary residences are wiped out in foreclosure. They can't pursue you in the future for a deficiency judgment. I have to state "I am not an attorney, this statement is to the best of my knowledge & experience, always consult an attorney".

I don't look back on this same Trulia thread for answers posted after mine.
562-430-3053 c
Realtor Since 1996
Main Street Realtors
0 votes Thank Flag Link Tue Aug 14, 2012
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