Nonrecourse debt forgiveness rental?
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If I moved out and converted my original principal residence to a rental sometime ago and it goes into foreclosure, am I liable for anything? Yes, it is now an upside-down mortgage.
From my research, California purchase money loans are nonrecourse and the lender can only take back the house. In addition, this nonrecourse foreclosure does not trigger cancellation of debt because the sale price is said to fulfill the outstanding debt even if less than what is owed. So does it even matter if it's not my principal residence or not? Please help, can't get straight answer on this. Thanks.
Nonrecourse debt forgiveness rental?Nonrecourse only applies to your primary residence, so you are out of luck there. Your primary residence is also not covered if you ever refinanced and removed any equity from the property.
Nonrecourse debt forgiveness rental?You need a good Calif real estate attorney that is familiar with the foreclosures laws.
In some states the foreclosure papers the way they are files will tell you whether its no recourse or no by saying something to the effect like this:
That the plaintiff does not seek a deficiency judgment against the mortgagor defendants.
That means the court will let the bank get the house but not get extra money from the person that had signed that mortgage.
Check your foreclosure papers you read through the: Affidavit to confirm and for additions to judgment
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