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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: Skeeter Bug who wrote (173353)12/24/2008 2:15:52 PM
From: Peter VRead Replies (1) of 306849
 
In California, any re-fi is a recourse loan. The law makes only "purchase money mortgages" non-recourse. Most people don't realize that.

The question is whether the bank will use the much more expensive judicial foreclosure to obtain a deficiency judgment. Non-judicial foreclosure in California is far cheaper, but it results in a non-recourse remedy, no deficiency judgment is possible.

Seems to me that a bank would be more likely to use judicial foreclosure only in cases where owners walk away, being able to pay but choosing not to. It's not worth going after people who are nearly judgment-proof, such as those who cannot pay the mortgage even after a loan mod.
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