Re: Considering Foreclosure due to divorce

Posted by dr on August 21, 2008 at 11:54:16:

In Reply to: Considering Foreclosure due to divorce posted by Kyle on August 20, 2008 at 13:03:14:

1. THE PURCHASE MONEY RULE:

In California, a lender who loaned you money to BUY your home, which you ORIGINALLY moved into as your primary residence, cannot do anything other than foreclose. This means if the foreclosure sale does not pay all “purchase money” loans, those lenders cannot sue you for the unpaid balance. Most importantly, this includes second mortgages used in many 80/20 100% financing deals. If you REFINANCED any of these loans, or paid down purchase money HELOC and drew down on it again, this rule does not apply.

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