Legal Question in Real Estate Law in California
I have a situation with my home (s) I have one in Ca. that I live in with a 2500/mo mortgage/ and I have one in Id with a 841/mo mortgage and has been rented for 3 yrs. My problem is that I have the same lender on both homes and I just lost my job. I can no longer afford to live in the Ca home. Can I live in my home in Id and can the lender force me to sell that and take what equity there is? Can I refinance the Id home to my wife only then go live in it? and walk away from the Ca home? Or just move to Id and begin looking for work there and leave my wife here until they forclose or short sale the home, she has a state position and we do not want to lose the benes yet.
2 Answers from Attorneys
The lender has to treat each property separately. They can only force a sale of a property if you have not made the contractually required mortgage payments. So you could default on the California home and live in the other one. Having the home foreclosed on is the worst of the options, but sometimes the only one.
Your proposed solution seems reasonable in the circumstances. The foreclosure of the CA house would be under CA law, and you'd enjoy the protections of CA's anti-deficiency statutes unless you fall into one of the unprotected categories, mainly having a loan which is a refi rather than the original purchase-money loan. Even if it is a refi, the lender would have to forego the quick and simple trustee-sale foreclosure proceeding and take you to court for a judicial foreclosure, which is expensive, time-consuming and gives you a redemption period. There is no risk-free solution, but if the CA loan is purchase money, you're pretty safe unless you have a loan-application fraud problem or have committed "waste" of the collateral (both unlikely).
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