Legal Question in Real Estate Law in California

Junior lien

We have a house we are trying to do a short sale on. The house is in a trust. The first has approved the short sale but the jr lien (heloc) says they are considering it a settlement and not a shortsale and wants 50%. If they force the house to auction do they get zero or do they have recourse? The purchase was a primary residence and I believe the heloc was originated as the second.


Asked on 10/01/08, 6:56 pm

1 Answer from Attorneys
Judith Deming Deming & Associates

Re: Junior lien

Was the second created at the time of your original purchase? If not, then they do not have to "deal" with you. If the house is not worth the amount of both the first loan and the second, the second can elect to do nothing and allow their deed to be extinguished by the foreclosure of the first trust deed holder. Then they can turn around and sue you as a "sold out junior lienholder" for the amount of money they are owed.

Read more
Answered on 10/02/08, 12:48 am


Related Questions & Answers

More Real Estate and Real Property questions and answers in California