Foreclosure in California>Question Details

Ronni, Home Owner in Grass Valley, CA

If I have to forclose on my home in california but I own a home outright in ORegon will the forclosure affect my oregon home

Asked by Ronni, Grass Valley, CA Thu Mar 17, 2011

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Legal disclaimer: I'm not an attorney, this is not legal advice, consult an attorney.

Okay, now the only way a foreclosure in California will affect your Oregon home, is if the lender seeks a deficiency judgment against you for the difference of your loan balance and the foreclosed value or foreclosure sale price plus attorney and legal fees. So the question is; can the lender seek a deficiency judgment?

If the loan was used as purchase money, to buy the house, then you are protected. California Code of Civil Procedure 580b prohibits a lienholder from seeking a deficiency judgment in California for purchase money loans. Also, I believe there's another law that stipulates once the lender proceeds with a foreclosure, that lender cannot seek a deficiency judgment.

If you short sale, then the 1st mortgage will not be able to seek a deficiency judgment either (so it says on California Association of Realtors Short Sale Information form).

Why foreclose if you have equity in another property? You can put a loan on your Oregon property, to satisfy your delinquency on your California property.

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0 votes Thank Flag Link Sat Mar 19, 2011
Good answer/caution from Zaza.

One other thing to look into is placing the Oregon property into a land trust with two beneficiaries--you and someone else who wouldn't be on the hook for the California foreclosure. I'm not a lawyer, so this isn't legal advice. But while real estate is real property, a land trust is personal property (and isn't subject to the same limits as real property). So: Ask your lawyer how to use a land trust to protect your Oregon property if he/she says that the Oregon property might be vulnerable.

Hope that helps.
0 votes Thank Flag Link Thu Mar 17, 2011
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
Ronni,
Very sensitive matter,please seek a legal advise. Mortgage company for the house in California may accomplish a Deficiency Judgment against you at the court, then They will be able to come after your house in Oregon. Please talk to a real estate attorney asap.

--
Zaza Pasori | PenFed Realty
11864 Sunrise Valley Drive,Reston,VA 20191
T. 202-412-5221 F. 703-716-0017 O.703-716-2900
http://www.penfedrealty.com

Equal Housing Opportunity
0 votes Thank Flag Link Thu Mar 17, 2011
Your best bet is to speak with a real estate attorney who handles legal matters such as this in your area...
0 votes Thank Flag Link Thu Mar 17, 2011
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