I live in San Diego. I am about $100,000 up-side down. whats my exposure if I let the property go into foreclosure?

Is your mortgage "purchase money," i.e., was this loan used to buy the house? If so, and you haven't financed and have used the house as your residence, there's an anti-deficiency law in CA that says that if the lender does a non-judicial foreclosure, which is the quickest and easiest, they just get the property back, and they can't then sue you for the $100K deficiency. A foreclosure will ding your credit, though.

Have you asked your lender about a loan modification? Some lenders are agreeing to 2 year interest-only loans, in the hopes that by then, the economy will have recovered enough for refinancing, more income, house sales, etc.


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I agree with Ms. Koslyn, but if your loan is not a purchase money loan (non-recourse) you could also consider a short sale. You could agree with the lender to not pursue a deficiency as part of the short sale.

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