Posted on: 07th Jul, 2008 01:38 pm
When I originally purchased my home in California it was owner occupied. However, I am contemplating foreclosure and was wondering if the loan is now a recourse loan because it is non owner occupied. The loan has never been refinanced.
Thanks,
kmart1523
Thanks,
kmart1523
Hi Kmart,
Welcome to our forums.
In California, most purchase mortgages are non-recourse loans. Just because you don't occupy it anymore, I don't think it gets converted to a recourse loan. Did you lender ever speak to you about it? I think he needs to send you a notice in such a case.
"
I am contemplating foreclosure"
First of all, why do you anticipate foreclosure? are you going through some financial crisis? Any late payments on your mortgage? Have a straight talk with your lender and check out which option he has to suggest for you.
You may check out some of the options yourself from information on the 17 ways to avoid foreclosure .
Good luck
Welcome to our forums.
In California, most purchase mortgages are non-recourse loans. Just because you don't occupy it anymore, I don't think it gets converted to a recourse loan. Did you lender ever speak to you about it? I think he needs to send you a notice in such a case.
"
I am contemplating foreclosure"
First of all, why do you anticipate foreclosure? are you going through some financial crisis? Any late payments on your mortgage? Have a straight talk with your lender and check out which option he has to suggest for you.
You may check out some of the options yourself from information on the 17 ways to avoid foreclosure .
Good luck
Oh! that was me above, I'd been logged out somehow... :)
Hi Kmart1523,
I too am concerned that you did not mention that you would like to know about options to avoid foreclosure. Contact your lender right away. There are usually several options available to you to avoid foreclosure. Foreclosure is very damaging to your credit.
Larry and Caron are correct about the recourse and non-recourse. I thought I would give a little deeper answer to your concern over that:
According to California law, a nonrecoursedebt is when a loan is made under either one of the following two circumstances:
When the loan is made to purchase a one-to-four unit property and the borrower intends to occupy at least one of the units, or
When the seller carries back financing for all or a portion of the purchase price of any real property.
In the event of default by the borrower, the lender, or financing seller, is restricted to recovering the property with no right to proceed against the borrower for any deficiency.
And California law states that a recoursedebt is one in which neither of those two exemptions occurs.
A recourse debt can be from refinances of existing mortgages, home improvement loans, equity lines of credit, and loans, other than seller financing, securing a debt for purchase of property that is not an owner-occupied one-to-four unit property. The lender is not limited to taking the property back and the borrower may be personally liable on the debt. If the lender chooses to foreclose using a trustee sale, then the lender waives the right to go after the borrower for the deficiency despite the fact that the loan was a recourse debt.
I hope that you have the information you were looking for. And please return to us for more information as you need it. Once again, always contact your lender and see what options you qualify for.
Good luck.
I too am concerned that you did not mention that you would like to know about options to avoid foreclosure. Contact your lender right away. There are usually several options available to you to avoid foreclosure. Foreclosure is very damaging to your credit.
Larry and Caron are correct about the recourse and non-recourse. I thought I would give a little deeper answer to your concern over that:
According to California law, a nonrecoursedebt is when a loan is made under either one of the following two circumstances:
When the loan is made to purchase a one-to-four unit property and the borrower intends to occupy at least one of the units, or
When the seller carries back financing for all or a portion of the purchase price of any real property.
In the event of default by the borrower, the lender, or financing seller, is restricted to recovering the property with no right to proceed against the borrower for any deficiency.
And California law states that a recoursedebt is one in which neither of those two exemptions occurs.
A recourse debt can be from refinances of existing mortgages, home improvement loans, equity lines of credit, and loans, other than seller financing, securing a debt for purchase of property that is not an owner-occupied one-to-four unit property. The lender is not limited to taking the property back and the borrower may be personally liable on the debt. If the lender chooses to foreclose using a trustee sale, then the lender waives the right to go after the borrower for the deficiency despite the fact that the loan was a recourse debt.
I hope that you have the information you were looking for. And please return to us for more information as you need it. Once again, always contact your lender and see what options you qualify for.
Good luck.
trying to avoid 2nd foreclosure. received notice of acceleration . bought as owner occupied,currently not livingb there 4 hours daily drive to work ,got to be too hard,but reconsidering moving back if have time to stop foreclosure, dont know or think have time before escalation of foreclosure process
Welcome jonah,
If you want to avoid foreclosure, you will have to contact the lender and apply for a loan modification. If the lender accepts your request, then you will be able to save the property.
If you want to avoid foreclosure, you will have to contact the lender and apply for a loan modification. If the lender accepts your request, then you will be able to save the property.