Legal Question in Credit and Debt Law in California
We sold our house in CA via short sale in October 2009. My first lender (Wells Fargo) agreed to a full settlement and my second lender HELOC (National City) released the lien but made us sign a letter saying we were still liable for the $120K loan. They were paid $3000 thru the short sale transaction.
I understand there is a 4 yr statute of limitations for National City to come after us for the debt. Our last payment was Nov 2008. They were paid $3K (thru escrow) in Oct 2009 when the sale closed. My question: did that 3K payment from escrow start our 4 yr clock over or does the clock still start from when we breached the contract in Nov 2008?
Thank you, I'm sure there are tons of people in this same situation!!
2 Answers from Attorneys
It should run from the payment of the $3000, since that is the last date that you paid on the contract.
I disagree with Mr. Marman, as I often do. Unless the $3000 payment brought you current on the debt, I would argue that the limitations on the contract runs from the last time you went into default, which sounds like it would be December 2008. However, you signed an acknowledgement or possibly a novation of the debt in the short sale (I would have to review the document to say what it's exactl legal effect was). They may be able to sue on that for four years from the $3,000 payment.
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