Property Q&A in 92880>Question Details

Shortsalehel…, Home Seller in 92880

Pursuing a short sale on a primary home, got 1st and 2nd mortgage with Chase, no refi. 2nd approved short sale but will pursue deficiency judgement--

Asked by Shortsalehelp?, 92880 Wed Jan 20, 2010

"The customer will still be responsible for all deficiency balances per the terms of the original loan documents and in accordance with applicable California law." Should I accept their term or do I turn them down? Will I go into foreclosure if I turn them down? Does Chase negotiate their terms? Under CA law, can there be a deficiency judgement?

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Answers

5
Realtors are strictly forbidden to give legal advice. The details of your transaction have bearing on the answers to your questions.
This is a big question for you and you really need to consult an attorney.
Web Reference: http://CoronasBestHomes.com
0 votes Thank Flag Link Tue Jan 29, 2013
Sounds like you have an agent allow her/him to answer your concerns,thanks HENA MARTIN ,BROKER 760-251-2868
0 votes Thank Flag Link Fri Jan 25, 2013
Contact an attorney that does free consultations, one that I have been recommending is: http://www.curtislawgroup.com

Don't try to figure this out by yourself! Real Estate Agents cannot give legal advice you really need an attorney for this!

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Web Reference: http://www.soreal.biz
0 votes Thank Flag Link Tue Jan 26, 2010
Short -

First step is to identify whether or not the loan(s) on your home are recourse or non-recourse loan. If they were loans for your initial purchase then they are most likely NON-recourse loans. If you refinanced or borrowed more money after the purchase, then they are most likely recourse loans. Meaning that the lender can pursue the debt.

However, I would recommend sitting down with a real estate attorney because California law provides some gray areas regarding this exact issue. The consultation with a lawyer that allowed you to strike this paragraph may very well be worth it.

The following link provided this information:

2. If the borrower takes a loan for purposes other than the purchase of a property, and he later defaults on the loan, the lender must first foreclose upon the property to satisfy the debt, but can thereafter obtain a deficiency judgment for the balance of the loan. But any such deficiency can be recovered only if the lender uses a judicial foreclosure rather than a private sale. If the lender pursues a judicial foreclosure, the borrower will have the redemption right to buy the property from the purchaser at the foreclosure sale. If the lender uses a private sale, it cannot obtain a deficiency, nor can the borrower redeem the property after the sale. If the lender tries to circumvent all of this, it might find itself barred under the one-action rule from recovering any part of the debt from the borrower, or at best its secured debt will become an unsecured one.

http://www.maldonadomarkham.com/california-foreclosure-law.htm

Good luck,
CJ
0 votes Thank Flag Link Thu Jan 21, 2010
First off, before you accept any verbiage on an approval letter, have a RE attorney review it.
Secondly, in CA if you had a 1st & a 2nd mortgage to PURCHASE a home, then they fall under the category of "non-recourse" loans and should not be subject to deficiency judgement. However, it is difficult to assess the situation without seeing your paperwork. Your short sale expert/negotiator/realtor should be able to negotiate the verbiage on the approval letter, given that it is a non-recourse loan. Many banks send out letters with standard verbiage instead of personalizing it to fit the individual state's laws.
Thirdly, none of us, as realtors, can give you advise as to whether or not you should accept their terms. We aren't lawyers or CPAs and you really need an advisor with that specific expertise to guide you. Best of Luck!
0 votes Thank Flag Link Wed Jan 20, 2010
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