Legal Question in Real Estate Law in California
re: can new home be taken if rental property is foreclosed on?
The new property has a loan that is completely clear of the rental property. There is only one loan on the rental and no money was ever taken out to buy anything. The new property is being bought with money we saved up on our own. Since the two properties only have the owner in common can the NEW property be taken if the rental property is left vacant. We are trying to prepare for the worst. We are afraid if the tenants leave we won't be able to pay two mortgages and will have to let the rental go. But we don't want to lose our primary residence. So if the houses are bought with two seperate loans does this make a difference if one gets foreclosed on?
2 Answers from Attorneys
Re: re: can new home be taken if rental property is foreclosed on?
When a loan is foreclosed on, the lender goes against the assets put up to secure that loan. They can not go after anything else, as it was not made security for the loan. Since you bought the residence after getting the loan on the rental, there is no way that the lender on the rental house loan can go against you. California has an anti-deficiency law which basically states that when the lender forecloses on the rental property, if the sum of money they get at the foreclose sale is not enough to satisfy the loan, they can take ownership to the property but can not go against you for the difference.
So stop worrying. But also sit down and try to figure out what would occur and what you should do under a variety of circumstances that could occur. Do not wait until a crisis occurs before planning what to do to stem it. There are different methods totry t soslve some of the problems yo ae suffering, along with millions of other Americans.
Re: re: can new home be taken if rental property is foreclosed on?
When a loan is foreclosed on, the lender goes against the assets put up to secure that loan. They can not go after anything else, as it was not made security for the loan. Since you bought the residence after getting the laon on the rental, there is no way that the lender on the rental house loan can go against you. California has an anti-deficiency law which basically states that when the lender forecloses on the rental property, if the su of money they get at the foreclose sale is not enough to satisfy the loan, they can take ownership to the property but can not go against you for the difference.
So stop worrying. But also sit down and try to figure out what would occur and what you should do under a variety of circumstances that could occur. Do not wait until a crisis occurs before planning what to do to stem it. There are different methods totry t soslve some of the problems you are suffering, along with millions of other Americans.
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