Legal Question in Real Estate Law in California

Re: Lender coming after me AFTER Foreclosure

If your second was "purchase money," i.e., you took out the second for the purpose of buying the home rather than taking cash out or refinancing, and the home was an owner-occupied building of not more than four residential units, the lender cannot successfully sue on the note. This comes under Code of Civil Procedure section 580b prohibiting deficiency judgments on purchase-money loans in nearly all cases.

Re: Lender coming after me AFTER Foreclosure

Unless the second was created simultaneously with the original loan whereby you bought the property, it is not a "non-recourse" loan and the holder of the second can sue you as a "sold-out junior lienholder" for the whole amount of the outstanding loan. Moreover, even if it was a non-recourse or purchase money loan created at the time of the purchase of the home, if you lied or made any false statement in order to get that loan (like said you made $5000 per month when you really made $4000) they can still go after you. It does not matter that you have nothing--they can get a judgment and just wait until you do get something. Judgments earn interest at 10% in California. You ask what your "rights" are--you had the right to honor your debt and pay back on your loan and the lender has the right to pursue you if you don't--they are doing nothing wrong.

Re: Lender coming after me AFTER Foreclosure

It is not clear from your question how the second loan is related to the foreclosure, if at all, though you do describe it as a "fixed second".

If you have no more money or any other assets, you should probably talk with an attorney experienced in bankruptcy law. He or she should carefully review all your loan papers, to determine whether the second loan is secured by your home, and if so, whether the lender is entitled to go after you for the deficiency left after the sale of the home in foreclosure. If so, bankruptcy may be your best alternative.