Legal Question in Real Estate Law in California

Re: voluntary forcloser

Well, a foreclosure is also a sale, or at least the process ends up with a sale, and under conditions that are not particularly favorable to you.

If you are absolutely certain that you are "under water" on the loan principal vs. the market value, maybe dumping the property and walking away is a realistic choice, but you need to consider the following first:

1. Likely serious impact on your credit rating;

2. Possible right of the lender to pursue a so-called "default judgment" if ultimate foreclosure sale doesn't produce enough money to pay off the loan plus the costs of foreclosing.

3. Possible further claim of the lender/secured party if any decline in the property's value was your fault, for example, you logged off a million board feet of timber and sold it, or you caused serious environmental pollution;

4. Possibility of a "deed in lieu of foreclosure." Some lenders will just let you deed the property to them so they don't have to foreclose on you. May save time, expense, and help your credit rating.

With respect to #2, a default judgment, you're usually safe if the loan to be foreclosed is a purchase-money loan as opposed to a refi, or if the lender chooses to foreclose by a trustee's sale rather than by judicial foreclosure in court.

This is a fairly complex area of the law, and for most homeowners making the right choice is not a trivial decision. You have provided only two short sentences of facts. Before you decide what to do, or what not to do, I recommend laying out your full story to a lawyer working for you.