Legal Question in Real Estate Law in California

Re: foreclosuer non owner occupied

It depends on a number of facts. Assuming the properties are in California, on all properties, if the bank finds there was fraud or misrepresentation of facts (like you claimed to have greater income than you did, or you lied and told the bank you were going to occupy the property and you never intended to, etc.), they can not only take back the property, but can sue you for a deficiency judgment and attack any property you own. To do this, they will not conduct a trustee's sale, they will sue for foreclosure in the courts. With respect to your home, if it goes into foreclosure and there was no misrepresentation in the making of the loan AND the loan was taken out at the time you purchased, they can only get your house. If the loan was refinanced, OR if there was fraud, they can go after a personal judgment in addition to taking your property. YOu really need to go to a real estate attorney for a thorough evalutation. However, I cannot stress strongly enough that if you are trying to get a new loan, or a loan modification, etc., make sure you do not make any statements in your loan documents which are untruthful, as the banks are starting to go after borrowers who lie to get a loan and then can't make the payments; oftentimes, it is the loan broker who makes the mistatements (they could care less, all they want are the loan fees) but even in those cases, it is the borrower's fault for signing.

Re: foreclosuer non owner occupied

Ms. Deming's analysis is pretty thorough for the amount of facts we're given to work with, and I agree with it except for one thing..... I believe there are now some cases suggesting that you can't be sued for a deficiency on a foreclosure of a refinance loan if you only refinanced the purchase amount and didn't take out additional equity. So that extends borrower protection and limits lender recourse a bit more.

Advising you on what to do and what to expect from your creditors would best be done after getting current market value information on both properties, to see how much equity or deficiency you're looking at. This information plus your income prospects (including both getting re-employed and finding a replacement tenant) will have a strong bearing on whether you face one or more foreclosures, whether you will be sued for deficiencies, and what your prospects are for refinancing the whole mess and avoiding foreclosure, lawsuits or bankruptcy.