Legal Question in Real Estate Law in California
Have a first and second mortgage. Discharged responsibility to the second in Chapter 7 BK court. Also discharged all rears owed to HOA in BK. Have been approved and in a loan mod for 6 months now, but have fallen behind again on HOA. Also getting letters from lender regarding foreclosure, and I believe this is about the second mortgage (which they claim wasn't in my BK). Question: 1a: Can either the second or HOA foreclose on the home, and cause me to lose the house while I'm current on the first? 1b: if so, which one. Question 2a: I've never "re-affirmed" with the HOA, so if I walk away from the home now am I free from financial responsibility because I've already included them in my BK (I'm aware there will still be a lien against the real property)? Even though we've received a loan modification we are still under server financial duress, and want to know the answer to these questions so we can best plan our future. Any legal advice you could give would be appreciated.
2 Answers from Attorneys
Your affairs are too complex for me to give you much advice. This should be done in a personal interview. However, the letters from any lender should be treated seriously - the lender is probably complying with the fairly recent law requiring a lender to try to communicate with the borrower prior to filing a notice of default, which in turn is the first statutory step in foreclosure. In answer to your specific questions 1a and 1b, either the 2nd noteholder or the HOA can foreclose without regard to the status of the 1st loan.
There is way too much you set forth, and a lot of issues that an attorney would need to address, that cannot be set forth in the space provided here.
I don't think the second can foreclose, if the underlying debt was discharged in bankruptcy. There is case law that the second can reattach, notwithstanding a discharge in bankruptcy, if you reacquire the property after the first attempts to foreclose. But I seriously doubt the second can foreclose now, or sue you on the note after the senior forecloses if the obligation has been discharged.
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