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sionzekaria · Joined: 17 Dec 2009 Posts: 1 1.37 Dollars($)

Hi,
We bought our house in 2007 in California. With my wife losing her job and the wall street collaspe , we are grossly behind on our payments We are currently in the short sale process for approximately 8 months with little or know signs of being able to enter into escrow. We are now facing the ugly possibility of facing foreclosure. My question is that is there any recourse if we complete the short sale or are foreclosed on. My understanding is that CA is a non recourse state with anti-deficiency laws protecting the borrower. Our 1st and 2nd are purchase money only with no refi's or helocs. Can collections come after us if we our 2nd does a charge off? Any information is greatly appreciated. Thanks in advance for the help

jenkin7 · Posted: Thu Dec 17, 2009 10:37 pm Post subject:

Hi sionzekaria,

If your house is foreclosed on or short sold and there is a deficiency, you will have to pay it off. In case the second lender charges off the loan and sells it to a collection agency, the agency will come after you for the debt. If there are anti-deficiency laws in your state and the mortgages are your purchase mortgages, you can claim protection against deficiency judgments. However, you need to consult an attorney to know if the anti-deficiency laws apply in your situation and to what extent they can protect you against the judgments.

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short sale / foreclosure