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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: jpk1 who wrote (74647)	3/24/2007 1:23:26 AM
From: Elroy Jetson	Read Replies (1) \| Respond to of 306849

Actually in cases where the bank takes a loss on your foreclosure, their possibility of suing for a "deficiency judgment" is potentially limited by two factors. 1.) . In Trust Deed states, such as California, lenders cannot obtain a deficiency judgment on a Trust Deed when the Trust Deed is foreclosed through the non-judicial Trustee Sale. In order to obtain a deficiency judgment, the lender has to foreclose through the judicial process in court, which takes longer and costs far more. So they have to decide up-front to make you feel pain. In Mortgage States like Texas this does not apply as all foreclosures are judicial and thus all deficiencies can easily result in a "deficiency judgment". 2.) . Many states, such as California, have anti-deficiency laws which prohibit deficiency judgments on "purchase money loans", which is the original mortgage used to purchase the house. These laws do not apply to refinanced loans or equity lines of credit. In many states it also does not apply to the "Second Mortgage" even if this was part of the original loan to purchase the home. So this limitation applies to very few facing foreclosure. .