Legal Question in Real Estate Law in California

Re: Can lender of short sell ut a lien an another property

When you refinance, especially with a cash-out, and the property is income property rather than your principal residence, you aren't protected from a deficiency judgment if the lender decides to go for a judicial (court) foreclosure proceeding rather than a trustee sale. Whether a particular lender would go to the time end expense of a judicial foreclosure depends upon the amount of the deficiency, whether the borrower appears to have other assets or income to satisfy the judgment, and to some extent, I suppose, the lender's attitude toward this loan and its overall relationship with the borrower.

I can't evaluate the proposed short sale as to whether it is a good business deal or not, but by executing a note you may be simplifying the lender's processes for tapping your other assets and getting paid - but I don't think the lender lacks access to your other assets anyway, if it decides to go to court.

Re: Can lender of short sell ut a lien an another property

That's not a short sale, and doesn't gain you a thing. The lender is simply moving your debt to another property with your agreement. Liens can only be placed on your other property with your agreement, or as a result of a court judgment, which would be a lien on all your assets. You'd be foolish to do this, unless you are also going to walk away from the other property.