Legal Question in Credit and Debt Law in California
Does the Homestead Act benefit a homeowner in the case of a foreclosure or a short-sale?
Asked on 6/29/10, 1:43 pm
3 Answers from Attorneys
Michael Stone
Law Offices of Michael B. Stone Toll Free 1-855-USE-MIKE
No.
Answered on 6/29/10, 7:37 pm
The homestead exemption is only a partial protection against involuntary liens, such as judgement liens. Voluntary liens, such as mortgages, are not affected.
Answered on 6/30/10, 12:37 am
Stan Lockhart
Law Offices of Nations and Lockhart
The homestead act only protects equity above the amount of the mortgages, so if there is no equity, i.e. the 'short' sale...there is nothing for the homestead to protect.
If the foreclosure results in a bid above the foreclosing beneficiary's minimum credit bid and there is no junior DOT, then the excess would be subject to the protection of the homestead act.
Answered on 6/30/10, 7:36 am
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