Legal Question in Real Estate Law in California

My mom bought a house under my name, and the house is under water. We owe $175,000 refinanced loan + $150,000 HELOC, house is worth $200,000. I'm not living in this house, my mom is, although it is not filed as a rental property. �She has been giving me money to pay for the loans. I want to do a short sale but I don't think the bank will approve due to my income. �

Is possible for me to somehow transfer the property to my mom so she can do a short sale? Or what is my best option to get rid of this house? Thank you for your help.


Asked on 1/25/11, 2:57 pm

1 Answer from Attorneys

Your mom didn't buy a house undeer your name. YOU bought a house for her to live in essentially as an "at cost" tenant. Your options for getting out of it are the same as if you live in it, or rented it out, or let it sit vacant. None of that matters as far as options. You own an upside down house. If you have too much income for a short sale, you have too much income for a short sale. It might be worth trying anyway. If that doesn't work, your best bet may be to let the HELOC foreclose via a trustee's sale, because that would wipe out your personal liability under the one form of action rule. Of course if you really are able to satisfy the debt, they might file a judicial foreclosure action to allow for a deficiency judgment. That hardly ever happens, but once in a while it does.

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Answered on 1/27/11, 6:51 pm


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