Legal Question in Real Estate Law in California

Re: foreclosure recourse

If you have a purchase money mortgage on the house, and it's being foreclosed, in a nonjudicial foreclosure, they take the house, but can't come after you for any money. If there's a second mortgage or line of equity, it's a different story.

Re: foreclosure recourse

If your loan on your residence is not a purchase money loan, (i.e., was not made at the time of your purchase, as opposed to a refinance)or was obtainedc by way of fraudulent means (such as false statements on a loan application )the bank can choose to pursue a judicial foreclosure and try to get a deficiency judgment for the difference between the value of the house sold at a foreclosure sale and the amount owed on the note. Putting the other building with equity into a trust to keep the bank from "coming after it" not only will not work, (as it is easy to uncover the fact of a transfer) but it can be pursued in a separate lawsuit as a fraudulent transfer to avoid paying of your debts...it is also dishonest to try to avoid paying your debts if you have the means to do so...it is this kind of refusal to accept responsiblity that has created the current financial mess the country is in.