does a non-judicial foreclosure, once completed, prevent a deficiency judgment on a loan from a bank used to purchcase commercial property?

We own a home in California which we have a 1st mortgage and a 2nd or HELOC. We are in a position that we need to sell quickly. We refinanced the first several years ago with some cash out to put a down on another home in Michigan which is also now for sale. Will the refi still be non-recoverable?
We also own a piece of commercial property in California which is free and clear and for sale as well. Nothing is selling as we are in 2 of the worst states in the nation for home value and sales. What would you suggest as our best option? The deficiency will be substantial and now we are not in a position to cover it. We cannot qualify for a loan against the commercial property as our income has been hit hard as well. We have used all our savings and are at a scary point. To sell the California home we would most likely have to bring a substantial amount to closing. We no longer have the money we had saved since we have used it to keep current on our loan payments. We are in our 60's so don't have the earning "time" to make enough to recover! Help...what do we do? What do you suggest as our best options?

If I leave my home during a forclosure or shall I say, before the "short sale", "deed in lieu of forclosure" or "the forclosure" process is complete can I get in trouble?? What I am trying to say is, am I obligated to stay in the house until the bank say's I can leave??? How does this work??? I want to proceed wtih the process in a legal manner but I also want to rent a place before the forclosure is on my credit report! Please help I'm totllay confused!!

Sinerely,
Confused in Virginia!

Mr Thompson,
I am attempting short sale of my primary residence in California. The loan was refinanced by another lender for a value lesser than the original loan. Can the lender obtain a judgement to recover the deficiency, since there was a refinance involved, though it was purely to pay the mortgage on the property?
TJ

hello, I live in CA but i bought a rental property in AZ during the boom. to make a long story short, im about to foreclose on the property because i was told it had better tax implications. my question is, can the lender come after me for the balance of thier losses?

thanks,
paul

hello Mr. Thompson - I have a property in california - I live in it and it is in default now for 14 months. I applied for loan modification and it was denied twice already by the first bank but that bank was bougth by another bank and I applied again the second bank did not forclose on my property when I have received already a notice of default before they took over the first bank and up to now it is still on review meanwhile the missed payment for 14 months has been added to my original loan amount and now my loan amount had gone up tremendously. I purchased the property for 432,000 I paid 20% down for an adjustable mortgage since it is adjustable I refinanced it and took back the money I put down plus 18,000 so my loan became 450,000. When I defaulted on my loan my balance was down to 440,000 but since I did not pay for 14 months they added that to the 440,000 plus the property taxes that I did not pay. My question is since I refinance do you still consider the 432,000 as purchase money since that is the original purchase price? if I walk away or foreclose or do short sale can the bank go after me for the deficiency judgement? The house value has gone down to 285,000 and my new loan balance is around 500,000 or more. Will you tell me what the best action that I need to pursue so that the bank will not go after my other property for the deficiency judgement if there is any.

we are located in CA, and in 2009 we had loan modification and short refinance on the same home that we are living. It is the principal residency. Now, I have two questions:
1. For tax purpose I have received 1099-C with the box 5 checked Yes. Based on my research, that means it is a recourse loan. But if I understand correctly, in CA the loan for principal home should be Non Recourse. So, I don't understand which one is the correct one for our situation.
2. If it is Recourse, does this mean that we have to pay back the amount that has been written off by the lender and shown in 1099-C? Or is this only in case of defaulting like foreclosure?
I would appreciate for any help.

Miguel (migchung@gmail.com)

Hello, in North Carolina, we have vacant, real estate property, with no structure. If we stop mortgage payments, go thru foreclosure, etc. (sale price will not surpass value of loan), will the bank pursue a deficiency judgement against other assets, such as our primary residence ( also in NC), bank accounts, 401K, etc.? Thank You.

Hello Mr. Thompson, I live in CA and our home is going through a Trustee Sale. I have been working with 4 different people regarding my home- and I have just been passed around over and over again trying to get approved for a Deed In Lieu of Foreclosure. Just recently when my 2nd mortgage agreed upon a settled amount for a payoff settlement- my loan with them was transferred to a Debt Collection Agency.
I now have lost all hope on trying to get this process completed, and my 1st mortgage company just informed me that they have decided on a Trustee Sale 15 days from today.
This is my first home, and I'm really in the dark as to the steps of the trustee sale and what happens to me afterwards and the unpaid balances on my 1st and 2nd mortgage. I ask my mortgage company reps and the worker from the mortgage company for help and explainations and they just keep passing me around.
I would just like to know what happens to me after the Trustee Sale and what happens to the unpaid loan balances after the trustee sale?
When I first bought the house- it was 100% financed- therefore I have a 1st and 2nd mortgage on the home. I did not take any equity out on it or refinance it. Can you please help me on providing some information Thanks.

Hello, currently we're selling our house in Queens, New York because mortgage payments have become too overbearing, but havent missed a payment. We have two loans with Chase, who has denied us twice of a loan modification (either lower interest or convergence into one loan). About two years ago, we refinanced, and have variable interest rates. The current value of the house is around 470k, but owe about 560k on the loan. Do you believe our best bet is to try to sell the house, go into foreclosure, short sale, bankruptcy? Will the bank file a suit for deficiency?
Our financial situation is such a burden, and we have even put $50,000 into credit cards because of our mortgage. Help please!!!!!!!!!!!

Hello...
Thank you for your informative website.
I have an investment property in Vallejo, Ca. I am thinking about short selling the property. I looked through my loan documents and it looks like I have a promissory note with the lender. The house has been refinanced and has one loan only. What can I do to negotiate successful non-recourse short sale? How do you recommend to find legitimate attorney to help you negotiate short sale?

Thank you.

Rose from CA

I have this rental property in Sacramento, CA and it just recently foreclosed after the bank denied our short sale applications (twice). I have 1st loan and 2nd HELOC. If the bank will cancell the debt thru 1099, does it mean we do not owe the bank anymore? If not cancelled, can the bank sue us or go against us with the defieciency? Does the bank had the right to garnish from our salary or put a lien against our primary residence? What actions do we need incase the bank will go after us? Is Chapter 13 a possible solution. How long does a Foreclosure and Chapter 13 will be reflected in our credit? Thanks and more power to you!

In '05 I refinanced my 1st mortgage to pay off a home equity loan so I would have one single mortgage. For some reason, the new loan was categorized as a "home equity" mortgage. Does that mean I would be liable for the deficiencies? I can't really afford the house as I keep using credit cards for emergencies or supplementing and I'm further in debt that when I started. I owe 124,000 and the homes in my neighborhood are only selling for 129,000 to 135,000... I may have to spend (& borrow) some money to get that price... then I'd have to pay the Realtor. Is walking away even an option?Wisconsin

Consequences after foreclosureHello Mr Thompson. Here is our story. We live in Illinois. We recently purchased a home in Arkansas to eventually move to when my husband retires.Well, two weeks after closing on this house in Arkansas, my husband lost his job. Being almost 65 years old, this speeds up our decision to get out of Illinois, as we can no longer afford two mortgages with my meager salary.The lendor of the first home says we have to try to short sale the house before asking for a deed in lieu. However, this is a depressed town. There are over 60 homes for sale in a town of 6000 people, and none of these homes are selling. We do not want to, nor cannot afford to pay the $1000 monthly mortgage payment on this Illinois house. (The county raised our proerty taxes by 300% since we moved here 3 years ago, which raised our monthly payment.... and even though we appealed the tax and got it lowered somewhat, we are still paying about twice as much for property taxes than when we first bought the house 3 years ago.)I have tried to be a good steward of the mortgage. I paid about $25,000 towards it from my inheritance to me... money now wasted. The fair market value of the house is still less than what we still owe.My question is......since we live in Illinois we are supposedly free from a deficiency judgment if it is considered a "consent foreclosure". But if the lendor somehow gets a judgment against us, what are the chances of them suing us for it since my husband is about 65 years old and currently is not working, and any deficiency would be meager in comparison to the deficiency of other foreclosures. (I know there are a lot of houses valued a lot higher than ours) If they garnished my meager salary, it would take them a century to recover the losses. Also, can the old lendor get a lien put on our newly purchased home in Arkansas? We are trying to get ahead...hence the purchase of a home in Arkansas, where we will virtually have little or NO property tax for the year. Staying in Illinois would cost us $28,000 in property tax over a ten year period!I guess my main concern is the degree of likelihood of a deficiency judgment, and the possibility of a lien being put on our newly purchased house in another state. I know our credit will be shot to heck, but we won't be buying anything major anymore anyway. Thank You.

I know there must be so many questions on purchase money.We bought the property in 2004 ( Loan amt: $300k / 1 loan ) Refinanced in 2006, took out $30k ( New Loan amt: $330k /1 loan ) If the property forecloses, would this be a recourse or non recourse loan?

I may have to give my home back to the bank . I live in California, my home was refinanced , and is my only residence . Should I file for bankruptcy before or after they foreclose in order to insure that they can't sue me for any difference ? Thank you

I am holding a balloon note on a property which is owned by an LLC. The LLC has failed to pay the last two payments and with only one month left before the note is due, how do I find out if this is a recourse or non-recourse loan in PA? And if there are any other properties held in this LLC are the other properties then due?

We purchased an investment property in Fresno that we are now attempting to do a Short Sale on. There is no second, and the paperwork is just about complete, but we are concern with this statement in the Short Sale Lender Agreement:The borrower must sign the attached acknowledgment to all terms specified in this approval and must acknowledge that Indymac Mortgage Services retains all deficiency rights as provided by the note, deed of trust and/or security agreement in accordance with local and federal laws.Can IndyMac come after us for the deficient amount if the sale is approved?

I own a home in Illinois, with a mortgage of 250k, and a market value of 500k. I have stocks of 200k. I bought a house in Nevada for 360k and have a mortgage on it of 300k. I rent the property, but it's market value is now 170k. The renters moved out and I can't get it rented. I would like to "let it go" through a foreclosure. I am concerned if the Nevada lender can lien my Chicago primary residence, and/or go after my stocks, and/or garnish my wages with a deficiency judgment. Do you know if they can? Also, I have contacted an attorney in Illinois who directed me to find a NV attorney, but my RE agent in Nevada said I need an Illinois attorney. Any thoughts? Your advice is greatly appreciated.

Thank you so much for replying to my questions about deficits in foreclosure. When this property was re-financed, it was refinanced for a residential loan, not a rental. My understanding is that this would make it a non-recourse loan? If it is a non-recourse loan, I was thinking that the bank could not sue me for a deficiencies. Is this generally true? Again, thank you so much for your response. I can not tell you how appreciative, I am.

I have a question in regards to what happens to other property that a person might own if a person is forced to foreclose on a home.  I have had renters in a home and they have just given me notice that they are vacating.  Without the rental money, I can not make the mortgage payment.  I do not have the money to go in and do a rehab on the property.  It is not rent-able until it can be rehabbed.  I owe the bank approximately $190000 and the tax value of the property is approximately $220000.   I think it would take about $50000 to do the work needed. I was declared disabled three years ago and the disability that I receive is not enough to make the mortgage payment on the rental property and pay my bills.  I have another rental property that is in my daughter's name and mine.  Can the bank take the other rental property that is held in my daughter's and my name? The rental properties are in N.C. Thank you for your help.   

hello Mr. Thompson i just have a question i hope i dont have to pay to get an answer because i wont be able to afford it :-) but if you could be kind just to answer me this question.I was told that when you let your house go on foreclosed the bank or whoever will try to look into your other properties and take them from you, sale them so that they can get some money back to pay what they lost by giving you the loan. IS THIS TRUE MR.THOMPSON?.

I live in California and we are behind on mortgage. We got denied on a loan mod for the 1st loan. Both my loans 1st & 2nd are with our lender. The 2nd is claiming they will garnish my wages if house is forclosed on and they don't get money back from sale. Can they take my wages? Thank you,

How can I determine if my present mortgage is covered by the anti-deficiency rules?

we purchase this house by have 1st loan for $400,000 and 2nd loan for 103,000 we put down payment 5% the purchase price $530,000 in 2005 never been refinance, my 2nd loan is in purchase money rule or not, if we borrow in the same day

if we are in purchase money rule, and they can't sue us for unpaid balace, do i still have to pay other bills like tax or something else?

we do not have enough to pay for other bills if they have, we need to file bankrupt if necessary,

thanks,

sarah