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

To: Skeeter Bug who wrote (173353)	12/24/2008 2:15:52 PM
From: Peter V	Read Replies (1) \| Respond to 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.

To: Skeeter Bug who wrote (173353)	12/24/2008 3:22:03 PM
From: tejek	Read Replies (1) \| Respond to of 306849

the banks and government are also trying to convert these no recourse loans into modified recourse loans - the new owner of that modified loan will be on the hook for the lost equity FOR THE REST OF THEIR LIVES. they won't be able to just walk away and be free of the home. It sounds like you're assuming that housing prices won't come back....in some areas like Detroit they may not but in areas like CA, AZ, NV and FLA, its very likely the prices will rebound sometime in the not so distant future.