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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: clochard who wrote (89249)	7/31/2009 1:57:55 AM
From: Elroy Jetson	Read Replies (1) \| Respond to of 94695

There are some recourse states, such as Texas, but most states have anti-deficiency laws passed during the Great Depression. This means the lender can only go after the collateral. Of course it usually somewhat more complicated. In California there's a one action rule, which means if the lender wants to pursue the borrower for the full loan amount they must foreclose judicially and waive their right to a transfer of the deed through the trust deed process. In any event, in most states, this means "home owners" are effectively buying a Call on a home. If the home goes up the value of their Call appreciates. If the home declines in value they lose only the amount of money they paid for the Call, which is their down-payment and their monthly payments. The writer of the Call, the lender, eats the balance of the decline in value. .