Certified Distressed Property Expert
Director of Short Sales Keller Williams RR Gable
WOW>>>>>>>>This is crazy. I see so many Real Estate Professionals saying with conviction that CA is a non recourse state if the loan is purchase money?
I bet you guys would give it in writing too huh......................
Well here is an advise people......There are two sides of the coin here. Even though the most of what you say may be true, it depends on who you talk to and who you are dealing with.
REAL Estate agents who call themselves short sale specialists........... I would like to give you friendly advise
READ the 580b law for yourself and have it interpreted by at least 5 attorney's. At least one of them will say that it refers to "FORECLOSURE" only and not Short Sale. Yes california is a one action state but to some Attorney's this may be true for only "Foreclosures" not short sales.
I would not want to get caught saying "Nope they cannot come after you".Yes there may be many of you "You can't tell us that" agents who are going to eat me alive here. I respect you all and am trying to tell you what would you rather go t court with........."I told my client that this is a non recourse state" or I told them that this may or may not be true and that they need to consult a legal professional.
I train Realtors and i would never ever have you say that to a client.Leave that to the legal professionals. Just a food for thought my friends.
Call me personally at 818-919-5656 if you ever have a short sale question. I will help you agents.
As a licensed attorney and a Realtor, I agree with Pebble. The law is very gray when it comes to short sales, especially with purchase money/second loans. It is wise to speak with an attorney, but be sure to find one who is familiar with these issues. I say this because most real estate attorneys will tell you they can handle your problem, but you really need one who has a lot of experience in this particular field and can teach you the available options.
Best of luck,
Rachel LaMar, J.D.
LaMar Real Estate, Inc.
I'm so sorry for what you are going through. I had a client with a similar situation as you, except they didn't have any money, they had to leave the country. They had no option but to go, regardless of what the banks were throwing at them. Their first was a purchase money loan and in their approval didn't state a deficiency judgment. Not so with the second, it was a line of credit and they reserved a deficiency judgment. I reviewed this with my clients, suggested they discuss it with an attorney and CPA, but in the end they sold short and took the risk. It is heart breaking.
Best of luck to you.
First off, Ca if a NON RECOURSE state, the lender cannot come after you if this was your primary residence and the money was used for purchase. Also, in a short sale, you are asking the lender to walk away from your debt, and they are allowing you to do this.
In a short sale, you pay ZERO! No commission, no title fees, escrow fees, you do NO repairs to home, or termite, warranties..NOTHING! You get to stay mortgage free til home is sold. Or vacate home at any time, if you can't be around til it is sold.
It doesn't matter if you have money to live in London, there are ways to still show that you are in a
financial HARDSHIP. I have done tons of short sales and continue to do them every day and was a short sale negotiator for a short sale negotiation company...
My current short sales, owner had over $500,000 cash in 401k and other accounts. Owner continued to make payments thru short sale process and maintained an 800 fico and bank did short sale. She is able to buy another home right away with the short sale and buy program .
Call me 310-429-4170
Real Estate Network Group
Short sale specialist!
You seem to have made up your mind that you don't want to keep the house so you have three options available to you.
1) deed in lieu of foreclosure. this is the fastest and most pain free for both you and your lender and essentially involves voluntarily handing over your property to the bank. No selling involved. Seems easy enough however the bank, as a creditor, may not look to kindly to a borrower with no financial hardship deciding to walk away and may look for some financial sacrifice on your end. This would require an attorney to help you navigate the settlement and insure that no deficiency or promissory note is involved.
2) walk away, let it go to foreclosure. Rarely if ever a good choice. Definitely the least popular with your lender and essentially wreaking havoc on your credit; which i know you mention you are not too concerned about at the current moment.
3) Short Sale. As my colleagues below mention, you want to make sure you have an experienced broker representing you because your situation requires not just selling a home but skillfully negotiating a debt settlement with the bank. Reading between the lines above you do seem to present a financial hardship, a seasoned negotiator will spot that issue and artfully present your case to the bank.
In terms of deficiency judgments and promissory notes, California is a single judgment state. This means the bank gets one choice to pursue their bad debt. More Plainly, if the bank forecloses with a non-judicial foreclosure there will be no deficiency judgments or promissory notes. Short sales most often present the banks with a better financial alternative than foreclosure (eg. they recover more loss). Recovering the most money is their primary concern.
Therefore, the banks should always accept a short sale offer at fair market value, if the buyer is able and qualified, the agent is honest and capable, and the negotiator is skilled and diligent. Knowing that they cannot pursue a deficiency after the foreclosure sale, any deficiency language can also be negotiated out of the approval letter (again this is specifically for California properties).
Best of Luck and enjoy London!
Allan S. Glass
ASG Real Estate Inc. Â®
149 S. Barrington Ave, Suite #660
Los Angeles . CA 90049
Direct: 213.973.8637 (213.97.FUNDS)
CA License: 01154002
Visit Allanâ€™s Blog: http://allanglass.featuredblog.com
ps: you've made no reference to a 2nd or junior mortgage. Although deficiencies can also be negotiated out of a junior lender settlement, it requires additional reasoning and language on the part of your negotiator
You should seek legal council in regards to collections, etc. There is no deficiency on the 1st, however, the lender could still ask for a contribution in order to approve. Any additional liens, 2nd's 3rd's, etc can ask for additional money. There are many factors that may come into play. However, in the case of your home... you should take your agents advice and reduce the price.
Depending on the lender, they have a formula they use in order to approve a shortsale. It is based on TODAY'S market value, not on what you owe... then the offer amount, less costs to close, and they the investors approval. Again, depending on the lender, I have personally gotten shortsales approved as low as 80% of todays market rate less costs.
Once approved, and hoping your agent is experienced with shortsales, you should have 0 costs, in writing and will be free on any continuing liability.
Always happy to assist.
Richard "RJ" Kas (SFR, SRES)
"Representing the finest properties from Los Angeles worldwide"
KAS Properties - Coldwell Banker Previews International - Beverly Hills East
9388 Santa Monica Blvd, Beverly Hills, CA 90210
310.859-5334 office - 310.488.9826 mobile - 310-273-0670 fax ATT: RJ
RichardKas@gmail.com - http://www.RJforLA.com - DRE: 01352771
Sellers Buyers Investors Leasing Consulting
Certified Distressed Property Expert
I work with Realtors and homeowners Short Sale their homes
Hello Can't sell house,
If you were 25k below the market value you would have activity or an answer. If you have been on the market for 3 months and no offers then drop your price.
As far as can the bank come after you even after foreclosing or short selling the home?
Well that depends on a lot of factors and to name a few important ones: Purchase Money or Non purchase money, what is written in the note you signed when you took the loan and the ability of your agent to negotiate with the bank to let you off completely as paid in full.
Please see this article by California Association of Realtors and this will answer your questions
I wish you luck .
Feel free to call me if you would like to have a conversation and discuss your different options.
Home Sales Pro
You have an excellent hardship reason & YOU would just refuse to sign a short sale approval letter if there is language in there about the bank reserving any right to a future deficiency judgment! Believe me they do NOT want to foreclose & will work it out with you, the listing agent needs to Negotiate this Language OUT of any short sale approval letter!!
If your 1st & 2nd loan were never refinanced & you get foreclosed on they can't pursue you for a deficiency judgment. You Will qualify for the Mortgage Debt Forgiveness act however if you short sell or go to foreclosure sale, so that's a plus.
If you have any other questions at all, feel free to shoot me an email directly. Between my negotiator & I we have closed over 500 short sales.
1. If the loans were used to buy the home (purchase money), then in California the lender cannot come after you for a deficiency judgment.
2. Effective January 1, 2011, a California law goes into effect that states if a lender accepts a short sale offer then they waive their right to a deficiency judgment, even if this is NOT a purchase money loan. (Unfortunately, this law only applies to a 1st Trust Deed.)
3. If both loans are with the same lender, there is case law in the State of California that precludes the lender from foreclosing on the 1st and then suing for a deficiency judgment on the 2nd.
4. Moving over 100 miles away from your home, for job reasons, is a sufficient hardship for the lender to accept a short sale. (I have recently helped two couples whose only hardship was a move required for work. They actually remained current on their loan throughout the short sale process.)
Of course, all bets are off is there is any fraud. So...., you need to work with a Realtor who has a lot of knowledge and experience in negotiating short sales. You may even qualify for a $3,000 moving allowance from your lender, if you do a short sale.
Every circumstance and set of facts is different. Feel comfortable giving me a call to discuss your specific situation. This is a service I offer at no cost or obligation to every homeowner. Get the information you need to make an informed decision. You know that informed decisions are the best decisions. Hope to hear from you soon. You can reach me at 424-2HELP12 (424-243-5712). Dare to Dream.
Shel-lee Davis, QSCÂ®
Certified Distressed Property Expert â€“ CDPEÂ®
Short Sale & Foreclosure Resource â€“ SFRÂ®
Certified HAFA Specialist â€“ CHSÂ®
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty
The answer to wether or not the lender or lenders can come after you for deficiency, is probably. However it depends on the type of loan that you have. if it is a purchase money loan, then the lender's only recourse is to foreclose and they cannot come after you... however" purchase money loan" is defined very narrowly and is difficult to answer the question without sufficient information.
You need professional help in assisting you with your short sale. best of luck!
Please see my blog on how to get your short sale approved.