Re: CA Foreclosure-Deficiency judgement

Posted by Jim V on August 03, 2006 at 23:59:40:

In Reply to: CA Foreclosure-Deficiency judgement posted by Don Lessbey on August 03, 2006 at 21:06:56:

It's going to be looked a litle more closely because a two month old loan doesn't normally go through foreclosure. If the divorce was initiated after the re-fi, that's an obvious reason why payments can't be made. But, if the divorce isn't final, then child/spousal support payments aren't finalized which means the lender will want their payments. Somewhat Catch-22.

CA doesn't allow a lender to use the trustee sale process, which is reasonably quick and doesn't incur a lot of costs, and also seek a deficiency judgment. To obtain a deficiency, the lender would have to pursue judicial foreclosure which is rarely exercised.

Hope that helps.


: I just re-fied 2 months ago and now im going through a divorce, and there is no/little equity left in the home to try and sell it. I cant afford the payment and child/spousal support, so I want to turn the home back to the bank. Im worried that they will try and get a deficiency judgment against me. Is this possible? Or will they just take the home and it will just ruin my credit? I want to work with the bank, but I dont want to owe anything after the fact if I let it go. What are the financial risks here?

Follow Ups:

• Re: CA Foreclosure-Deficiency judgement - Don Lessbey 07:06:15 08/04/06 (3)
  • Only if your lender suspects and can prove fraud [nt] - RSI 07:51:06 08/04/06 (2)
    • Assistance with Housing Issue - Rich Kelley 23:31:04 08/08/06 (0)

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Comments:
: It's going to be looked a litle more closely because a two month old loan doesn't normally go through foreclosure.  If the divorce was initiated after the re-fi, that's an obvious reason why payments can't be made.  But, if the divorce isn't final, then child/spousal support payments aren't finalized which means the lender will want their payments.  Somewhat Catch-22.

CA doesn't allow a lender to use the trustee sale process, which is reasonably quick and doesn't incur a lot of costs, and also seek a deficiency judgment.  To obtain a deficiency, the lender would have to pursue judicial foreclosure which is rarely exercised.

Hope that helps.
  

: I just re-fied 2 months ago and now im going through a divorce, and there is no/little equity left in the home to try and sell it.  I cant afford the payment and child/spousal support, so I want to turn the home back to the bank.  Im worried that they will try and get a deficiency judgment against me.  Is this possible?  Or will they just take the home and it will just ruin my credit?  I want to work with the bank, but I dont want to owe anything after the fact if I let it go.  What are the financial risks here?



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