If I own two houses, what happens if I lose the first home? Will I lose the second as well?

Asked by Mpg, Chino Hills, CA Wed Sep 9, 2009

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Mia Sophia M…, Agent, Claremont, CA
Wed Nov 11, 2009
Hey there MPG!

Great question! So, what you need to know is that each home you own is totally and completely separate from one another in every way and what happens to one does not in anyway effect the other. This sounds kind of crazy but if one house burned down, would your other home burn down, too? Of course not! Unless they were right next to each then I guess my analogy wouldn't work :-) But, the bottom line is that just because one home goes to foreclosure does not mean the other home will too.

The reason for this is, each home has it's own separate loan and defaulting on one loan doesn't change the other. Also, California is a "non-judicial" state when it comes to foreclosure which means the lender's recourse in a default situation is to take back the home after a lengthy foreclosure process similar to an eviction process but three times longer! I'm the broker for a property management firm in Ontario called http://www.renttoday.us and what's wierd is that when we evict people, afterwards we get a monetary judgement for what that tenant owed and it goes on their credit and we can try to collect that judgement by garnishing wages, bank levies, attaching their other properties, etc.

On a foreclosure (which seems much more serious than an eviction), in California the lender does not pursue a monetary judgement for their losses. They take the home back and that's pretty much it! You do not have to worry about a lawsuit, a judgement, filing bankruptcy...that sort of thing. And because there is no judgment, your other assets are safe from those types of liens.

Fine Print: Of course, every individuals situation is slightly different and I have to tell you not to take this advice in the place of legal advice! If you have questions about legalities or taxes make sure you speak to an attorney or your accountant for those things :-) Got it?

Well, good luck MPG!!! If you decide to leasing your home may help you not lose it in foreclosure than please give our offices a call anytime! We can help you decide what the home can lease for and get a tenant in place asap!

Sincerely,

Mia Melle, Broker
West Coast Property Specialists, Inc. / Renttoday.us
http://www.renttoday.us
http://www.wcpsinc.com
Web Reference:  http://www.renttoday.us
0 votes
Amy Steele, Agent, Crestline, CA
Fri Sep 11, 2009
You will only lose your home if you are not current on your mortgage for that home only and you are foreclosed on. It is not an automatic thing! Good luck!
0 votes
Jesse Sierra, Agent, Pomona, CA
Thu Sep 10, 2009
Hi MPG
Have you called your lender's loss mitigation department to see if you can restructure your mortgage on your disstressed property.
I have a question? Did you refinance your disstressed home to purchase your second home?
If you did, did you have a prepay penalty on the refinance. If your prepay penalty hasn't matured, there might be some tax ramifications.
Talk to a real estate attorney, not a regular attorney but a real estate attorney or certified public accountant to see what are your options.
If you have tried to restructure your loan with your lender and did not go through, I can help you sell your distressed home.

Hope everything works out for you and your family,

Jes Sierra, B.Sc.
C21 Beachside, Realtors®
Chino Hills, Ca
0 votes
Dina Romero, Agent, Upland, CA
Wed Sep 9, 2009
There shouldn't be any reason for you to lose the 2nd home, as long as you are staying current on your mortgage payments.
Web Reference:  http://www.dinaromero.com
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