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To: Cynic 2005 who wrote (371751)	7/24/2008 9:13:41 AM
From: stan_hughes	Read Replies (1) \| Respond to of 436258

There's another element to that transaction you've described -- a refinanced new mortgage no longer qualifies as "purchase money" under California law, meaning that the bank can now go after any other assets the borrower may have should they default in the future, whereas beforehand the mortgage was a non-recourse loan, i.e. the bank could only seize the home itself if the owner defaulted -- not vehicles, not boats, not savings accounts, not stock portfolios, not jewelry, not other houses -- nothing, nix, NADA, just the mortgaged house in question So it was probably an owner-occupier that made this refinancing deal, because they need to stay in the home since they actually live there. Contrast that situation to so-called investors who probably lied about self-occupancy when they bought the house to get a better interest rate -- these investors could care less about refinancing, because as non-occupiers in no need of a place to live since they may own 5-10-20 houses, the California system strongly encourages such people to do the jingle mail thing if the loan blows up. Far better to stick the bank with an impaired property than give them a shot at attaching an enforceable claim to one of your other assets I've heard some mortgage expert Einsteins on TV saying that they can't understand why such a high percentage of homeowners haven't tried to contact their mortgage servicer to work out their underwater loans. Well, duhhhh..... how many no-money-down dudes who still have millions in outstanding loans do you think want to be found?