Legal Question in Real Estate Law in California

My CA registered domestic partner and I are getting a dissolution. She has kept all of our property and I am very angry. When we purchased our house the loan was in her name only, and she later Quit Claimed me onto the deed as a joint tenant. Now she wants me to quit claim off of the house to her so that they can do a short sale, since she has now defaulted on the loan. I am not inclined to do her any favors and the judge has not ordered me to. If I refuse to allow the short sale and it goes to foreclosure, do I have financial liability for the outstanding balance on her mortgage loan?


Asked on 2/08/10, 2:09 pm

1 Answer from Attorneys

This is not a question that can be answered definitively without reviewing the full financial history of the situation. If the loan was taken out during the domestic partnership, you definitely have some potential exposure to liability for the debt. If it was a purchase money loan, however, the lender cannot go after either of you after a foreclosure. The same is NOT true after a short sale. This is a big nasty secret the lenders have. There is an anti-deficiency statute for purchase-money loans that are foreclosed. It doesn't apply after a short sale. You and your partner need to cooperate on this one against the bank or you both could get nailed. Get some good joint advice on this from an attorney who has reviewed all the facts and documents to make sure neither one of you gets a nasty surprise from the bank, or the tax man.

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Answered on 2/13/10, 2:22 pm


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