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Is a second mortgage in California non-recourse?

Newport Beach, CA |

I took out my the first mortgage in 2003 with Chase and then took out a second mortgage (not paying off the first) in 2005 with B of A. In 2011, Chase foreclosed, but the proceeds from the sale did not pay off the second. The second has sent me letters threatening to come after me for a deficiency judgment in the amount of the loan, $124k. I have heard that in California a second mortgage is non-recourse? Is this true, can B of A come after me for the deficiency?

Attorney Answers 3


Non-recourse means that can only foreclose and not sue you. The loan you describe sounds like a recourse loan and they CAN sue you for the unpaid balance. I recommend contacting a local bankruptcy attorney for further help.

First, the firm is a debt relief agency according to the U.S. Bankruptcy Code. We help people file for bankruptcy. We also do other stuff and we do it well, but Congress wants me to post this notice. Second, nothing on this site is legal advice. You are not my client unless you enter into a written agreement signed by you and me.

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Based on the facts you have presented, you are liable for the second mortgage. Because this was a refinance loan, it does not fit within one of the safe harbors under the anti-deficiency statutes.

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Second mortgage is not recourse if it is a purchase money loan. Purchase money loan is a loan taken to buy the property. Here you describe buying the property and later borrowing against it. Yes, they can sue to collect a deficiency. You can either 1) ignore and hope they miss the statute of limitation to sue you 2) attempt to settle for less than what is owed 3) bankruptcy to discharge the debt.

I am not YOUR lawyer. Don't rely on answers to questions as legal advice. For legal advice contact a Bankruptcy Attorney for a consultation. Tokarska Law Center is a Federal Debt Relief Agency representing individuals and businesses in filing for bankrutpcy protection under the U.S. Bankrutpcy Code. Kathryn U. Tokarska is a San Diego Bankruptcy Attorney, owner of Tokarska Law Center, 185 West F Street #100, San Diego, CA 92101, (619) 285-1992

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