How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Tina Your Own Question

Tina
Tina, Lawyer
Category: Real Estate Law
Satisfied Customers: 32721
Experience:  17 years of legal experience including real estate law.
4460311
Type Your Real Estate Law Question Here...
Tina is online now
A new question is answered every 9 seconds

rental california

Customer Question

Have a rental property in California purchased i 2006. Lived in it for 5 years before renting it. Refinanced 2 times for lower rate. Also have HELOC that ballooned, I stopped paying, they were not in the money, but kept current on the 1st (also not in the money). First was modified by BofA a few years ago to an interest only. Never used 1st to take out money, etc. Only HELOC and put that money back into upgrading home. Question: In california, is my 1st recourse or non-recourse? Property is rented.  No one ever foreclosed or tried to short sale the property because it was underwater on the HELOC.  HELOC is not in money yet but may be if prices continue to go up. They have made me an offer to settle 16K on 45k of debt. I was going counter again for 12K. I am concerned in my interest only mod on the priXXXXX XXXXXes the status of recourse vs. non recourse? If I want to walk away in years from now on the 1st, I don't want them to come after me on the 1st for any difference. The second, I will try to negotiate out of it or pay the amount due. They are upside down still on the HELOC. My concern is the 1st and what that means.

Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Tina replied 1 year ago.

Hello and welcome.

My name is XXXXX XXXXX my goal is to provide you with excellent service today. Before I can give you an accurate answer to your question, please provide the following additional information:

When you refinanced the first loan, did you go through the same lender as the original loan, or did you use a different lender?

I look forward to assisting you as soon as I have received this information. Thank you.

Customer: replied 1 year ago.

Lenders: 1st was etrade, I believe it went through Countrywide, and then refi through BofA...

Customer: replied 1 year ago.

One more detail, they have put "charge off" on my credit report which now is the same as a "foreclosure" notation which stops me from getting any future home loans for 7 years. I am drafting a letter for a settlement offer to PNC on the HELOC. My first is in the money right now, but with interest rates on the rise again, that could be short lived. There are renters in the property currently and I just signed lease for 2 more years.

Expert:  Tina replied 1 year ago.
I see. Thank you for clarifying that, Lynn.

Yes, I would request that the lender withdraw that information from your credit report in return for payment of an amount you ultimately agree on.

Unfortunately, when you refinanced the property with a different lender, you would typically lose the protection afforded by CA anti-deficiency laws and the first loan would become a recourse loan, such that the lender could potentially pursue a deficiency judgment against you.

Here is a link which summarizes the law on this issue (See item 2 in particular):

http://www.jdsupra.com/legalnews/seven-steps-to-determine-if-your-loan-is-80558/

If the lender were to pursue a deficiency judgment, they would typically be required to pursue a judicial foreclosure since CA law also requires that the foreclosure and anti-deficiency suit be filed in one action so the lender could not file suit seeking a deficiency judgment after they engage in a non-judicial foreclosure.

I hope this helps clarify the situation for you. Please remember to rate my service once you have all the information you need so I will be compensated for my time from the deposit you posted with this website. If you have any other questions, please ask me – I’ll be happy to respond. Thank you!

Tina

Customer: replied 1 year ago.

I don't know if you received my reply. It looks as though I am in a "recourse" position. Please explain "one action". Let's say I walked away and the difference on what was owed is 100K. Do they have to foreclose and sue me at the time? Please explain this because it does make a difference on whether I ask the tenants to leave and sell the property asap. I don't want to be on the hook for any of this. THanks.

Expert:  Tina replied 1 year ago.
Hello again,

Yes, it does look like the loan would be a recourse loan unfortunately.

The one-action rule typically means that the lender must seek a judicial foreclosure if they wish to seek a deficiency judgment since if they pursue a non-judicial foreclosure (do not file suit seeking an order of foreclosure), they waive their right to pursue a deficiency judgment against you.

Here is a link which provides a link on their site to a pdf file which explains the one-action rule further:

http://www.hklaw.com/publications/Foreclosure-Law--A-Brief-Overview-of-Californias-One-Action-Rule-and-Anti-deficiency-Provisions-08-01-2012/

I hope this helps clarify the situation for you. Please remember to rate my service once you have all the information you need so I will be compensated for my time from the deposit you posted with this website. If you have any other questions, please ask me – I’ll be happy to respond. Thank you!

Tina

Customer: replied 1 year ago.

I am sorry, I had to leave and just returned. To finish up with this, can they put on my credit report a "charge off" with nothing to back it up. There is no foreclosure, no judgment, no documents that they produced to show they could actually do that to me. I stopped paying on the loan because I did not believe the loan was a balloon like they said and I have asked them to produce the the documents and of course they will not. I guess they can just go in even if the information does not get back up with any kind of documents and they can make a notation of whatever they wish. I thought that was against the law but maybe not. Our laws don't seem to care about us anymore. Let me know and I will rate your information. I did not know you don't get paid without it. Sorry it took long. Lynn

Expert:  Tina replied 1 year ago.
Hello again, Lynn.

My apologies for the delay. I had logged off for the night when you responded.

If you were delinquent on the loan, the lender could report that to the credit reporting agencies and also decide to write off the loan rather than pursue foreclosure. Often, a holder of a second mortgage will not choose to foreclose since the holder of the first mortgage would get priority and the second lender would get nothing, so foreclosure would not benefit them, and they therefore choose to write off the loan.

It does not appear from the facts you have provided that they did anything unlawful. I'm sorry.

Thank you very much in advance for a positive rating. Many customers are not clear that a positive rating is necessary before we are compensated. Thank you for acknowledging that.
Tina, Lawyer
Category: Real Estate Law
Satisfied Customers: 32721
Experience: 17 years of legal experience including real estate law.
Tina and 11 other Real Estate Law Specialists are ready to help you
Expert:  Tina replied 1 year ago.

Thank you very much for your positive rating of my service. It has been my pleasure to assist you and I hope you will ask for me should a future legal need arise.

If you receive a Customer Satisfaction Survey from JustAnswer, please consider scoring me a 9 or 10. It benefits my ability to assist you and other customers, and would be tremendously appreciated.

Thanks again and all the best to you.

Tina

Note: Please feel free to request me if you have future legal questions by typing your new question in the question box on my profile page. Here is a link to that page, which you can bookmark or add to your favorites: http://www.justanswer.com/law/expert-tina/. I look forward to hearing from you again should the need arise.

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
 
 
 

Meet The Experts:

 
 
 
  • Tina

    Lawyer

    Satisfied Customers:

    4813
    16 years of legal experience including real estate law.
< Last | Next >
  • http://ww2.justanswer.com/uploads/MU/multistatelaw/2011-11-27_173951_Tinaglamourshotworkglow102011.64x64.jpg Tina's Avatar

    Tina

    Lawyer

    Satisfied Customers:

    4813
    16 years of legal experience including real estate law.
  • http://ww2.justanswer.com/uploads/LA/lawpro/2012-6-25_171315_PT206740s.64x64.jpg Law Pro's Avatar

    Law Pro

    Lawyer

    Satisfied Customers:

    6227
    20 years extensive experience in real estate law, foreclosure, finance, and landlord tenant law.
  • http://ww2.justanswer.com/uploads/BA/barristerinky/2012-6-10_22423_office.64x64.jpg Barrister's Avatar

    Barrister

    Lawyer

    Satisfied Customers:

    4966
    13 years real estate, Realtor. Landlord 24+ years
  • http://ww2.justanswer.com/uploads/LA/LawTalk/2012-6-6_17379_LawTalk.64x64.JPG LawTalk's Avatar

    LawTalk

    Attorney

    Satisfied Customers:

    4446
    I've more than 27 years legal experience. Additionally, in CA I held a Real Estate Broker's license.
  • http://ww2.justanswer.com/uploads/RA/rayanswers/2012-6-7_23346_Untitled1.64x64.jpg Ray's Avatar

    Ray

    Lawyer

    Satisfied Customers:

    4030
    Texas Attorney for 29 years dealing in real estate
  • http://ww2.justanswer.com/uploads/PH/philip.simmons/2012-6-7_161915_BIGPhilipSimmons.64x64.jpg P. Simmons's Avatar

    P. Simmons

    Lawyer

    Satisfied Customers:

    2377
    12+ yrs. of experience including real estate law.
  • http://ww2.justanswer.com/uploads/mnphillips2/2009-03-13_203105_10984459-249293407.jpeg Phillips Esq.'s Avatar

    Phillips Esq.

    Attorney-at-Law

    Satisfied Customers:

    2355
    B.A.; M.B.A.; J.D.
 
 
 

Related Real Estate Law Questions

Chat Now With A Real Estate Lawyer
Tina
Tina
Attorney and Counselor at Law, Mediator
5379 Satisfied Customers
17 years of legal experience including real estate law.