Legal Question in Real Estate Law in California
Hi! My here's my serniro we were going to do a short sale on our home Bank of America approved the sell, but they tooks so long to seal the deal the buyers walked away this happended twice. We have no choice but to let the house go into foreclosure.
We had a first and a second loan on the property. My question is will they be able to get a judgement against us for the second? will we have to repay on the second?
2 Answers from Attorneys
If the second was "purchase money" (used to acquire the home) and the home was owner-occupied, you are protected from suit by the antideficiency laws. Otherwise, there is a slight to moderate risk of a suit, or being dunned by a bill collector for a speculator that has purchased the defaulted second trust deed for pennies on the dollar.
The other thing I would add, or rather ask, is who is the holder of the second and first deeds of trust? When a senior forecloses, the junior becomes a frozen out junior lienholder, and can sue the trustor on the obligation. But that rule does not apply if the senior and junior are the same lender.
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