I have a property in the East Bay. I had stopped paying my second loan more than 2 yrs.
I’m thinking of selling my property. Will I legally able to sell my property. Or bank will have a lean on my property. What should I do? . How can I settle this debit. Can I legally remove this debits. All your help is really appreciated.
Real Estate Attorney
You can legally sell the property. The lien of the second remains despite your failure to pay. However, the buyer will have to pay the delinquent second as well as the first. No problem if you have equity in house.
If you do not have equity, you can try a short sale. Your realtor will help negotiate price with 1st and 2nd. You want to make sure that 2nd agrees to waive any deficiency. 1st is waived under CA law.
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There is probably insufficient information to respond to your question. Why would you think you do not have the legal right to sell the property? Has it already been foreclosed upon by the second? If not, then you can sell the property, subject to paying off the secured lenders. The only ways to remove the first and second deeds of trust is to either pay them off in full or a short sale wherein the lender agrees to take less than what is owed.
Yes, you can legally sell your property. The first deed of trust and the second deed of trust are encumbrances upon your property, which secure loans to third parties. If you are able to find a buyer who wants to buy your property, then the third party lenders who's loans are secured by the first deed of trust and second deed of trust will submit demands into escrow to have their loans paid in full. Any sale proceeds left after the first and second are paid in escrow and your share of closing costs are paid in escrow will be your money. As part of the sales price, you can ask the buyer to assume the loans to the third party lenders if the loans are assumable.
If you have no equity in the property, then you will have to negotiate with your lenders. One possibility will be to do a short sale. If you are not making payments on the second loan, then you want to sell the property before the holder of the second loan forecloses on your property.
The crucial question is whether you have any equity in the property. You can attempt to settle the second loan by negotiating with the lender. You can not legally remove the deeds of trusts on the property unless the deeds of trust are no longer enforceable because (i.e.,) the statute of limitations has run on the third party lender enforcing the debt owed by you to him..