Foreclosure in Fresno>Question Details

Sookeyoos1, Home Buyer in 32571

We bought a home in California in 2004, since then the home has been foreclosed on ...Now when we took out the loan we had to take out a first and

Asked by Sookeyoos1, 32571 Sat Nov 28, 2009

second mortgage out to cover the loan....Now do I have to pay the 2nd mortgage if they have sold the home in Auction....

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2
Hello Sookeyoos1 and thanks for your post.

First, let me preface this by stating that I am not an attorney nor a legal expert. The following information is my opinion based on information given to me by mortgage professionals, and is not a legal opinion. Your best course to obtain legal advice is to speak with a qualified real estate attorney in your area. Now, having said that...

In California, a "purchase money loan" or loans used to purchase the home are considered "non-recourse" loans--meaning, if the home is foreclosed, then the bank may not seek recourse from the owner for the outstanding balance. Thus, if when you purchased the home, you needed both a first and a second loan to buy the home, then both are considered purchase money loans. However, if you purchase the home using one loan, and then got a second loan to help you cover the costs of updating, renovating or just paying for the first loan's monthly fees, then the second loan is NOT a purchase money loan and, as I understand it, is a recourse loan.

Again, speak with a mortgage professional and attorney for help in determining how you should handle the second loan.

Sincerely,
Grace Morioka, SRES, e-Pro
Area Pro Realty
1 vote Thank Flag Link Sun Nov 29, 2009
Sookeyoos,

We can not give legal advice, best bet is to talk to a real estate attorney.

Best Regards,

Jes Sierra, B.Sc.
Realtor®
Century 21 Beachside Realtors®
Chino Hills, California
0 votes Thank Flag Link Sun Nov 29, 2009
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