Legal Question in Real Estate Law in California

Hello,

For reasons of a bad business deal with family, I lost a home to foreclosure in 2010 in the state of Califonia. The original loan had a second attached to it for the purchase of the home. Fast forward to now, I have learned form my mistakes and I am ready to purchase a new home. However, the second is coming up on my credit report as charged off/written off. The loan officer says they need a letter or some form of documentation from the lender of the second stating they have forgiven the loan and will not pursue a judgement or place a lien on future property. I don't think the lender will provide anything like. Does anyone have any quick advice? I know CA has some Laws that are specific to Second mortgages originally obtained for the purpose of purchasing a home. Can anyone elaborate on that for me?

Thank you very much,

JL


Asked on 6/16/14, 5:38 am

2 Answers from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Code of Civil Procedure section 580b provides a borrower with protection against suits for deficiencies after a trustee's sale under a wide range of circumstances, but not all. One of the requirements is that if the lender is a third party (not the seller), the property has to be occupied entirely or in part by the borrower/purchaser. In other words, if the home you lost were investment or income property rather than your residence, you'd not have protection against a suit for deficiency after a foreclosure of the senior loan.

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Answered on 6/16/14, 8:59 am
Anthony Roach Law Office of Anthony A. Roach

I doubt you will get a letter from the lending institution. You should ask whether or not they would accept an opinion letter from an attorney who could review the matter for you. If so, there are attorneys who draft those letters and usually only bill an hour or so.

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Answered on 6/16/14, 9:30 am


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