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Answers (7)
- shasta_steve
- Contributions:448
California is a non-recourse state, so theoretically, the only recourse the lender has is to recover the collateral for this loan---provided that this was a purchase money loan.
That is not 100% true. The loan also has to be the original loan. If the loan was refinanced, for any reason, it is now recourse.
However, lenders are aggressively pursuing borrowers who default on non-recourse loans if they can find any kind of misrepresentation on the original loan application or supporting documentation used to obtain the loan.
That is just a scare tactic. They may go after a few ones that really crossed the line but they do not have the time or inclination to go after everyone. I have read about hundreds of foreclosures in California and have yet to hear about the banks going after anyone. Hell they won't even do a judicial foreclosure on recourse loans to try and collect. Most of the fraud was being committed by the lenders anyway with the full knowledge of the banks. Everyone was making money.
That is not 100% true. The loan also has to be the original loan. If the loan was refinanced, for any reason, it is now recourse.
However, lenders are aggressively pursuing borrowers who default on non-recourse loans if they can find any kind of misrepresentation on the original loan application or supporting documentation used to obtain the loan.
That is just a scare tactic. They may go after a few ones that really crossed the line but they do not have the time or inclination to go after everyone. I have read about hundreds of foreclosures in California and have yet to hear about the banks going after anyone. Hell they won't even do a judicial foreclosure on recourse loans to try and collect. Most of the fraud was being committed by the lenders anyway with the full knowledge of the banks. Everyone was making money.
- workabee
- Contributions:1030
I say stick it to the man, but call an attorney first to be safe. In Cali, you should be in the clear unless they can prove fraud.
- OelrichTeam
- Contributions:0
California is a non-recourse state, so theoretically, the only recourse the lender has is to recover the collateral for this loan---provided that this was a purchase money loan.
However, lenders are aggressively pursuing borrowers who default on non-recourse loans if they can find any kind of misrepresentation on the original loan application or supporting documentation used to obtain the loan.
If you are not absolutely positive that your loan application was 100% complete & accurate, and that every item (e.g., income, assets, etc.), was fully documented with 100% accuracy, I would recommend you consult with an attorney who is up to speed on such matters, as a default can really open up all kinds of other legal issues as well.
If your loan is non recourse, then yes you could do this. This will depend on your state law, and your particular loan. Did you take any cash out or refi, etc?
- Stan Yunatanov, "Yuntax"
- Contributions:2
worst case you could settle your debt, you should contact with attorney who practice bankrupts and settlements
- shasta_steve
- Contributions:448
I know you will probably hate this answer but it depends.
If you purchased the house as your primary residence, the loan or loans was all purchase money and you have not refinanced then the answer would be yes. Your loan would be non-recourse and you would not have to worry about anything, including taxes, but a credit hit.
If you refinanced and only have one mortgage then the answer would be almost certainly because California has the "one action rule" and if the bank forecloses non-judicially they are not allowed to pursue you for more money. They always foreclose non-judicially but I guess there is a chance they could go after you in court but highly unlikely. You may have taxes to deal with in this situation.
Now if you have a second that was not purchase money or it was refinanced then they could and probably will try and collect if you foreclose.
Note I am not a lawyer and it might not be a bad idea to talk with one. The truth is most of them don't know the law that well either. I would be more worried about tax conseqences. If you gave a little more information I could tell you about what you will probably expect. Before you do anything you need to do lots of research or pay an expert.
If you purchased the house as your primary residence, the loan or loans was all purchase money and you have not refinanced then the answer would be yes. Your loan would be non-recourse and you would not have to worry about anything, including taxes, but a credit hit.
If you refinanced and only have one mortgage then the answer would be almost certainly because California has the "one action rule" and if the bank forecloses non-judicially they are not allowed to pursue you for more money. They always foreclose non-judicially but I guess there is a chance they could go after you in court but highly unlikely. You may have taxes to deal with in this situation.
Now if you have a second that was not purchase money or it was refinanced then they could and probably will try and collect if you foreclose.
Note I am not a lawyer and it might not be a bad idea to talk with one. The truth is most of them don't know the law that well either. I would be more worried about tax conseqences. If you gave a little more information I could tell you about what you will probably expect. Before you do anything you need to do lots of research or pay an expert.
- shapiroamg
- Contributions:3058
You might want to run that by an attorney.
walking away from home.
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