Posted on: 13th Jul, 2010 06:53 pm
Ok here's the situation:
Home purchased in 06 for $475,000, 100% financed on an 80/20 loan. Home is in CA and currently valued at $175k. I see no reason to keep paying on this. I had refinanced the 2nd loan but took no cash out.
If I walk, I expect the 1st to foreclose and the 2nd to come after me for the deficiency of around $90k. I was then planning to either settle or BK my way out of that.
However . . . The CA Senate just approved a new bill that would make this 2nd a non-recourse purchase money 2nd, even though I refinanced. The Bill is currently in the Assembly and is likely to pass and be signed into law. The caveat: It will only provide the protection to cases filed AFTER 6/1/2011. So, I am wondering if I should stick to my original plan OR if I should wait out another 9 months or so and then walk so that both loans are non-recourse? Any thoughts or ideas?
Home purchased in 06 for $475,000, 100% financed on an 80/20 loan. Home is in CA and currently valued at $175k. I see no reason to keep paying on this. I had refinanced the 2nd loan but took no cash out.
If I walk, I expect the 1st to foreclose and the 2nd to come after me for the deficiency of around $90k. I was then planning to either settle or BK my way out of that.
However . . . The CA Senate just approved a new bill that would make this 2nd a non-recourse purchase money 2nd, even though I refinanced. The Bill is currently in the Assembly and is likely to pass and be signed into law. The caveat: It will only provide the protection to cases filed AFTER 6/1/2011. So, I am wondering if I should stick to my original plan OR if I should wait out another 9 months or so and then walk so that both loans are non-recourse? Any thoughts or ideas?
Hi Hopeful,
I would suggest you to wait for few months and see if the new bill gets passed into law. If it passes into law, then both the loans will become non-recourse and the lender won't be able to come after you for the balance amount if you let the property get foreclosed by the lender.
Thanks
I would suggest you to wait for few months and see if the new bill gets passed into law. If it passes into law, then both the loans will become non-recourse and the lender won't be able to come after you for the balance amount if you let the property get foreclosed by the lender.
Thanks
Hi Hopeful:
My wife and I are in the same position, but we stopped paying back in March. Our first just filed the Notice of Default, so we have another 4 months minimum before the property is auctioned. And even then we can likely still stay here. So, it takes 8-12 months just to get to the auction, and after that the 2nd will likely start getting aggressive. We're still waiting around for the 2nd to do something...anything. Looks like they're waiting for the auction.
So, if you think the law will pass, as I do, I would stop paying, save your money, and ride the process out. No way the 2nd files suit in the next 10 months prior to the June deadline. I'm not even sure that they'll file prior to next June against us...15 months later!
Good luck!
My wife and I are in the same position, but we stopped paying back in March. Our first just filed the Notice of Default, so we have another 4 months minimum before the property is auctioned. And even then we can likely still stay here. So, it takes 8-12 months just to get to the auction, and after that the 2nd will likely start getting aggressive. We're still waiting around for the 2nd to do something...anything. Looks like they're waiting for the auction.
So, if you think the law will pass, as I do, I would stop paying, save your money, and ride the process out. No way the 2nd files suit in the next 10 months prior to the June deadline. I'm not even sure that they'll file prior to next June against us...15 months later!
Good luck!
Thanks for the replies.
Jay: we are certainly leaning towards that. My concern is that the 2nd may get more aggressive knowing the law will soon pass. I hate to wait around and then have it not pass. I am thinking my worst case might be that I have to settle with the 2nd. I should have enought o do that if I save properly. My 2nd is with GMAC. Who is your's?
Jay: we are certainly leaning towards that. My concern is that the 2nd may get more aggressive knowing the law will soon pass. I hate to wait around and then have it not pass. I am thinking my worst case might be that I have to settle with the 2nd. I should have enought o do that if I save properly. My 2nd is with GMAC. Who is your's?
Sorry for my bad english. Thank you so much for your good post. Your post helped me in my college assignment, If you can provide me more details please email me.