Legal Question in Real Estate Law in California

Effect to my first house
I have 2 houses. I am staying the old-house which has equity $200,000. The second house bought 2006 and currently has no tenant bought as $560,000 which only pay ARM $2500 with $800 monthly property tax. My question is I would like to go foreclosure on the new house since I am unemployment. What happend to my old house.

Asked on 3/13/08, 11:18 pm

2 Answers from Attorneys

Bryan Whipple Bryan R. R. Whipple, Attorney at Law

0 users found helpful

0 attorneys agreed

Re: Effect to my first house

The answer to your question as to what will happen to your old house is "probably nothing at all" if all of the following are true:

(1) All of the financing on the second house is "purchase money," i.e you didn't refinance or take out a second after you bought it;

(2) If the purchase money included both a first and a second deed of trust, the seller carried the second (and not a third party, such as a bank); and

(3) Your loan application was completely honest and did not overstate your income or net worth.

If all three of these are true, and you have taken good care of the new house, your old house is probably safe in a foreclosure. If one or more of the above is not true for your situation, you might be in some danger of a judicial foreclosure and deficiency judgment, especially since you have $200K equity that the lender would like to reach if it can.

Answered on 3/13/08, 11:44 pm

Mark as helpful