Please seek the advice of a CPA and RE/Tax Attorney. These are the ONLY experts you should be getting advice from when it comes to any â€œdistressed sellingâ€. Once you have a strategy THEN inform your RealtorÂ® so the strategy can be executed.
Sameer has offered that if your loans are purchase money loans (never refinanced original purchase loans) then you are protected from a deficiency judgment. Iâ€™m not positive this is completely true as it is my belief this law only applies to a first deed of trust loan.
If you review the link Sameer supplied you will also see that any Promissory Note you sign MAY be subject to rescission:
â€œAlthough some lenders disagree, it has been argued that the anti-deficiency protections of CCP 580b would continue to apply even if there were a short sale and the property were released from the deed of trust with the consent of both the lender and the borrower. If a borrower were to execute a promissory note to the lender for the amount of the deficiency following a short sale, it has been argued that such deficiency note would be subject to rescission on the grounds that there was no consideration for such deficiency note since the borrower was not legally liable for any deficiency that is represented by such note.â€
Para 5 under â€œAnalysis of CCP 580eâ€
However, if you placed the property into a Trust, section â€œExceptions for Corporations and Public Agenciesâ€œ implies you will not be protected!
Again, I would highly advise you read the link that Sameer provided in its entirety and then make an appointment to speak to both a CPA and RE/Tax Attorney! The actual text of SB931 can be found here: