Legal Question in Real Estate Law in California

Re: foreclosure in california

In California the standard secured loan is via a deed of trust that allows for a private sale of the property for foreclosure. If the private sale is used, which is almost always the case,the lender is limited to taking over the property but can not go against you for anything else. So your home is fully protected. Since the property ils iln California, California law should apply unless you agreed in the sales agreement to use another states laws [California law might still apply].

You should not let your rental properties go into foreclosure. You might be able to work out a rental with option to buy for the current tenant, sell the property at a discount but still a profit to you, try to get through to the loss risk department of your lender and work out s deal to reduce the mortgage payments, etc. See earlier answers to foreclosure questions for hints as to what you can do.

Re: foreclosure in california

I think the answer is a bit more complex. Generally, a deed of trust lender is required to go after the collateral before going after the borrower, and indeed cannot go after the borrower in some situations. Those include (a) when the lender chooses to foreclose under the power of sale in the deed of trust, i.e., through a trustee's sale, or (b) when the foreclosure is "judicial" (in court) and the loan was purchase money. However, in the case of income property not the borrower's principal residence, a lender who is not the seller, i.e. not helping out with the purchase financing by carrying back part of the purchase price, can go after the borrower. So can a refinance lender in a judicial foreclosure.

In addition, when the foreclosure is by the holder of a senior obligation, the junior lender or lenders are left unsecured when the senior's sale takes place, and if they can't be paid off from the proceeds, they can go after the borrower directly.

Sound complicated? There's even more to it, but you should see a lawyer with the details of all your loans.

Re: foreclosure in california

The answer is far too complex, and has many ramifications.

Consult with a real property attorney, before you do anything regarding the possible foreclosures.