Elizabeth Weintraub #00697006 Lyon RE,
Broker, Sacramento, CA
First, understand that real estate agents cannot give legal advice, and I happen to be a real estate agent, not a lawyer. If you did not take out that second mortgage to help buy the house, then the second mortgage is most likely not a purchase money mortgage. Purchase money mortgages carry no personal liability in California, but hard-money mortgages do and the lenders have recourse. They can pursue you and get a deficiency judgment, which means the judgment will be recorded in the public records. By having a judgment recorded in the public records, you will be unable to sell or buy another home in that county until you pay off that mortgage because a title company will not insure you. That mortgage holder has priority over another lender who may consider making you a loan, so that lender will not loan to you, either.
If this was a home equity loan that you obtained after you bought the house, you should talk to a real estate lawyer to determine your rights at this point.
If this was a home equity loan that you obtained after you bought the house, you should talk to a real estate lawyer to determine your rights at this point.
Web Reference: http://elizabethweintraub.com
Christopher Walker,
Broker, 92544
California does not provide recourse for "purchase money" loans with only rare exceptions. Purchase money is when you are taking a loan at the time of purchase. If you have re-financed your home, taken out a HELOC or other loan after the time of purchase, your lender may have the ability to collect from you even after foreclosure. It is imparative that you seek the advice of a competent real estate attorney immediately.
David Turturici,
Broker, 95826
Hopefully this has been resolved for you by now, since I see you posted back in 2007. If not, it may be time to consider a bankruptcy. After a bankruptcy discharge is entered, any attempt to collect the debt is considered a violation of the federal court's discharge injunction. Furthermore, the bankruptcy discharge is clear to everyone that you do not owe anything on the debt.
-David Turturici, Attorney at Law / Broker
-David Turturici, Attorney at Law / Broker
Web Reference: http://visvires.net/Bankruptcy/BankruptcyBasicsII.html
Lisa Forss, QSC, E-Pro, Realtor,
Agent,
I agree with Elizabeth and Christopher. It's now time to contact a real estate attorney to identify your specific case and remedy. If the HELOC was used to help purchase the home, it's different then if you took out a HELOC after you closed escrow. Just clarify it with a real estate attorney so you know how to move forward.
