InnoVest Resource Management's Foreclosure Forum

Home Discussion Board "Hands-On" Training Title Holding Trust Speaking Schedule Store Foreclosure Codes 50 State Resource Data Foreclosure Glossary Foreclosure Statistics 60+ Yrs Interest Rates Fillable Forms Archived Articles Dingbat Retirement Plan Links Contact / Map Home

[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Purchase money status defeats qualifying for a deficiency judgment.. Posted by Ward-CA- on January 16, 2004 at 12:08 AM In Reply to: 2nd lenders right for deficiency judgment post auction posted by David F on January 15, 2004 at 12:47 AM : Ward, : Re your article last month about mortgagees' rights to pursue deficiency judgment. : SITUATION : Owner's condo in CA was auctioned at a foreclosure auction 2 weeks ago. The senior lender was the one who completed the foreclosure. The junior lender never did issue an NOD. The senior lender was fully paid off from the proceeds of the auction, but proceeds were not enough to completely pay off the junior lender. Both loans were secured by trust deeds that were recorded concurrently with the grant deed by which the owner originally took title. The junior lender is now trying to garnish the wages of the owner. : QUESTIONS: : 1. Is the junior lender counted as a hard money lender, even though it's trust deed was given when the owner FIRST (i.e., not later) bought the property? (in last month's article you said, "If a homeowner borrows cash and guarantees its repayment by giving the lender a promissory note and deed of trust against real property that he or she ALREADY owns, the loan is characterized as a "hard money" loan." : 2. Can the junior lender legally garnish the owner's wages post auction? And can it do this WITHOUT suing the owner first? : 3. Can the junior lender pursue deficiency judgment? : 4. How can the owner get this lender off his back for good? complete BK chapter 7? : : Thank you, in advance. : David =?=?=?=?=?=?=?=?=?=?= David, #1. No, the 2nd lienor isn't a hard money lender. It is a purchase money lender because it made its loan at the time of the property's purchase and is secured by said property. #2. No, according to CA law a purchase money lender cannot pursue a deficiency judgment of any kind against the borrower...and that includes any garnishment or levy of any kind. And a prerequisite for such an action would have to be getting a judgment first. #3. No, see response to #2. #4. The owner doesn't have to do anything since the junior lienor can't do anything but seek remedy against the secured property. Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : : Ward, : : Re your article last month about mortgagees' rights to pursue deficiency judgment. : : SITUATION : : Owner's condo in CA was auctioned at a foreclosure auction 2 weeks ago. The senior lender was the one who completed the foreclosure. The junior lender never did issue an NOD. The senior lender was fully paid off from the proceeds of the auction, but proceeds were not enough to completely pay off the junior lender. Both loans were secured by trust deeds that were recorded concurrently with the grant deed by which the owner originally took title. The junior lender is now trying to garnish the wages of the owner. : : QUESTIONS: : : 1. Is the junior lender counted as a hard money lender, even though it's trust deed was given when the owner FIRST (i.e., not later) bought the property? (in last month's article you said, "If a homeowner borrows cash and guarantees its repayment by giving the lender a promissory note and deed of trust against real property that he or she ALREADY owns, the loan is characterized as a "hard money" loan." : : 2. Can the junior lender legally garnish the owner's wages post auction? And can it do this WITHOUT suing the owner first? : : 3. Can the junior lender pursue deficiency judgment? : : 4. How can the owner get this lender off his back for good? complete BK chapter 7? : : : : Thank you, in advance. : : David : =?=?=?=?=?=?=?=?=?=?= : David, : #1. No, the 2nd lienor isn't a hard money lender. It is a purchase money lender because it made its loan at the time of the property's purchase and is secured by said property. : #2. No, according to CA law a purchase money lender cannot pursue a deficiency judgment of any kind against the borrower...and that includes any garnishment or levy of any kind. : And a prerequisite for such an action would have to be getting a judgment first. : #3. No, see response to #2. : #4. The owner doesn't have to do anything since the junior lienor can't do anything but seek remedy against the secured property. Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

Information provided by this website is for informational purposes only and is not a substitute for professional advice. Please consult your investment advisor and/or attorney before entering into any transaction. Read our privacy policy.

Copyright © 1997-2004, InnoVest Resource Management
http://www.foreclosureforum.com

InnoVest Resource Management, 4569-A Mission Gorge Place, San Diego CA 92120-4112
(619) 283-5444, Fax (619) 283-5455