Kaing,
It's a 50/50 chance. This is not legal advice. Consult a Real Estate Attorney and not a regular attorney, there is a diffrence. The junior loan can come after the deficiency within 4 years. Although, if your agent negotiates with the junior loan to be satisfied (accepting said amount to forget about the deficiency) you will be free and clear of them comming after you.

Best Regards,

Jes Sierra, B.Sc., Realtor®
Your top source to buy or sell real estate.

Kaing: You need the advice of a legal expert who can review your loan documents to answer this question. It depends on if you had a second trust deed and if it is a HELOC or not. I refer people to http://www.curtislawgroup.com - for a free consultation.

Good Morning Kaing,

I know this will confuse you some but the short answer is no and maybe. The truth is that it depends on your loan. If your loan was a purchase money loan, meaning that the money borrowed was used for the sole purchase of the property and or capital improvements then the answer is no. This would be a non-recourse loan and the lenders only source of recovery is the net funds received in the sale be it through short sale or foreclosure and resale.

However, if the money borrowed involved a cash out refi or a secured line of credit and the funds were used for anything other than the purchase of the property or capital improvements then the lender will probably hold a unsecured note against you and in most cases will attempt to negotiate a payment settlement even if they allow the short sale to proceed.

Your Real Estate consultant should be able to provide you with the correct information once he or she understands your particular financing details.

I hope that this helps

Frank Spencer
Broker