Legal Question in Real Estate Law in California

Hi,

In January 2010 I was forced to short sale my duplex (which I also lived in) due to the economy turn. My agent at the time mentioned something about a time frame after the short sale that the bank can come back and try to get some of the debt cancelled back from me. The agent said that if a relative died and left me an inheritance or if I won the lottery that I would need to pay the debt cancelled back.


Asked on 2/04/11, 6:19 am

2 Answers from Attorneys
Anthony Roach Law Office of Anthony A. Roach

Your agent shouldn't be practicing law without a license.

You're not protected by the new anti-deficiency prohibition of Code of Civil Procedure section 580e. The lender can sue you for a deficiency, which is the amount of the difference between the debt and what was realized at the short sale, unless the lender waived the deficiency in writing as a condition of the short sale, or you are protected by section 580b.

I wouldn't be able to tell you whether you meet the requirements of Code of Civil Procedure section 580b without more information from you.

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Answered on 2/08/11, 4:21 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Your agent is on the right track. Prior to 1/1/11, short sales could result in either the lender giving up all its claims on you, or not giving them up, as part of the deal. Read your paperwork to see what kind yours was. Things are a bit different now, Any holder of the first lien must now surrender its claim for a deficiency when it does a short sale with the borrower.

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Answered on 2/08/11, 9:01 pm


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