Legal Question in Real Estate Law in California

Foreclosure, followed by serious credit-rating damage. Lenders seldom can come after borrowers personally for a deficiency, and few if any FHA backed loans would fall into a category where the lender would even have a legal right to pursue a deficiency. Your greatest risks of being sued in connection with any aspect of the loan would be (1) if you were a rich guy from whom a deficiency would be easy to collect; (2) the lender has cause to believe you cheated on your loan application, or (3) you took incredibly bad care of the property while it stood as collateral for the loan. If there are junior loans on the property, however, which are not for purchase-money on an owner-occupied home, the foreclosure of the 1st loan will cause them to lose their collateral and they can come after you personally for their now-unsecured loans.

As Mr. Whipple indicated above, there are too many consequences including major credit damage. Are you sure you want to walk away? You might qualify to modify your loan which might include reducing the interest rate or even the principal balance depending on your particular situation. This might be an appropriate option for you even if you owe more than the house is worth, specially if this is your home. If you want to find out more information give us a call at 323-549-9385 or contact us at [email protected]