Legal Question in Real Estate Law in California
I hold a second on a place I sold 7 yrs ago, another private party holds first. Buyers had a ballon to be paid in 5 yrs to both of us, they could not pay it and we both agreed to continue accepting monthly pmts. They defaulted on tax's after first year and the city was going to auction it. They havent made a pmt to me since may, but are still paying on first and are now current on tax's. I am on a low income budet and cant afford to foreclose and pay off first. The holder of the first wont work with me and feels I should just walk away. I went and lived with my mother and rented out my home just to try and keep it, to have a renter get me in foreclosure. I need what they owe me to try and start again. What can I do?
3 Answers from Attorneys
You can always sue for the debt without foreclosing. That could easily take a year, however. Why don't you just foreclose and sell the property?
If the property is worth more than the balance of the first, then you would get to keep any amount above that sales sum, less costs of the sale. Speak to the debtor to see what they are willing to do to avoid your foreclosing. Once you file for foreclosure, they will probably stop paying the first and the first will then also foreclose.
I like the idea of negotiating with the borrower. Deciding what to do is more of an economic question than a legal one, however. What are the loan balances, what is the property worth today, and is an uptrend under way or likely soon?
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