Legal Question in Real Estate Law in California

Re: Foreclosure Problem

I'm a bit unclear on what happened here. If the 1st mortgage holder foreclosed, then you no longer own the home, and cannot "deed in lieu" the home to anyone. I think you may be using the wrong terminology. Are you saying that the second deed holder is trying to get a settlement of $17,000 from you on the $330,000 note? When the first foreclosed, the second became a "sold-out second" who still has a promissory note signed by you saying you will repay him $330,000. Just because the security for that note (the home) has been lost in foreclosure doesn't necessarily mean that that lender cannot continue to come after you for the $330,000 in full. I really cannot answer your questions because the information you posted is just not clear enough to fully gauge what is going on.

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