Replies to This Discussion

Permalink Reply by Bryant Tutas on January 15, 2010 at 1:10pm

Cindy. You should seek legal advice on this. I'm in Florida and our laws related to deficiencies are different than CA. BUT it's quite normal for the 2nd lien holder to release the mortgage/lien so the transaction will close but not release the borrower from the promissory note. Do you have an attorney you can consult?

I'm sorry to hear of your troubles and truly hope you can put this all behind you in due course. Hang in there.

Permalink Reply by Bob Wienk on January 16, 2010 at 2:12pm

Cindy:

Sorry to hear you are having this problem! While I no longer practice real estate in California and I am not an attorney, Brian's advice is correct. You should contact an attorney. I think (my opinion) that if both loans were "purchase money" loans, meaning they were both taken out to buy the house, you should be relieved of the debts once Chase approves the short sale offer. But if the second loan was a Home Equity Line of Credit (HELOC), you may have a tough time getting them to release that lien. In this case, try to offer them a non-secured promissory note for 10% of the balance due, at 0% interest for 10 years. They may take it.

Are you using a Realtor who is experienced in short sales? If you are trying to do this on your own, good luck!

Permalink Reply by ElizabethWeintraub00697006LyonRE on January 17, 2010 at 6:47am

There are no deficiency judgments allowed on purchase money second loans in California. That's just standard verbiage Chase throws in. In fact, most second loans have no equity, no security for the loan, and if it goes to a trustee's sale, they get wiped out. However, don't construe this to be legal advice because I cannot give legal advice. This information comes from the California Association of REALTORS. If you want legal advice, you need to ask a lawyer.

Permalink Reply by Sandra Early on February 23, 2010 at 6:47am

Chase 2nd liens are a nightmare!!!!!!!!!!! My client has 1st and 2nd with Chase and Chase 2 will not negoiate anything affordable/reasonable with my client. After he spoke to his attorney this morning the attorney recommends bankruptcy if Chase will not take our 4K offer (suppose to close in a week). Well...that is 4 months of work down the toliet with 7 individuals involved...title, buyers agent, buyers, buyers lender, sellers and me...

Permalink Reply by Dominique Van Ryckeghem on February 23, 2010 at 7:08am

Hi Cindy,

What is the value of the home, what is the offer price, what is the 1st getting and what is the 2nd getting?

Are the loans purchase money (original loans you got to buy the property with) or refinance loans?

California Association of Realtors has an article on deficiencies that is here: http://www.car.org/legal/leader-articles/deficiency-judgments-ca-law/

And here is their deficiency chart: http://www.car.org/legal/2008articles/deficiency-judgment-chart/

If you can't access those publicly then have your realtor print or email those to you.

Dominique

Permalink Reply by Jennifer Klein on March 1, 2010 at 9:29am

Do you have a suggestion as to what can be said/sent to Chase in order for them to honor the purchase money "rules." In my experience, they blatantly disregard these standards that have been set forth. Please advise.

Elizabeth Weintraub said:

There are no deficiency judgments allowed on purchase money second loans in California. That's just standard verbiage Chase throws in. In fact, most second loans have no equity, no security for the loan, and if it goes to a trustee's sale, they get wiped out. However, don't construe this to be legal advice because I cannot give legal advice. This information comes from the California Association of REALTORS. If you want legal advice, you need to ask a lawyer.