Recourse Loan - How to be Sure?

[sonickitty]

My home is in California. My First loan was with Countrywide in 2004. In 2005 I reified with a broker who sold to Sierra something or other and then they sold back to Countrywide. Now of course with B of A. (actually somehow BONY is now involved and might be the actual owner and now b of a just the servicer)

Since I refied - even though I am in California, is this now automatically a recourse loan because it was refinanced from the original loan? Is there anything on the loan paper-work which indicates if it is recourse or non-recourse?
If I get a short sale, can B of A come after me for the amount "forgiven"? Is there usually something written into the short sale agreement that says they won't come after me for the amount forgiven?

Thanks!

[Jeffrey L. Shurtliff]

I believe California is a non recourse state. If you have a second, that does have recourse. The amount forgiven in the short sale is carried over to a 1099 to you at the end of the year.

[sonickitty]

I believe California is a non recourse state. If you have a second, that does have recourse. The amount forgiven in the short sale is carried over to a 1099 to you at the end of the year.

Hi Jeffrey - thanks. Yes, CA is a non recourse state. But my understanding was that is was only for a non-refinanced first loan. So basically wondering since my loan is a refinance, if I do a short sale can they come after me for the amount forgiven. (not including the tax part).

[Jeffrey L. Shurtliff]

Hi Jeffrey - thanks. Yes, CA is a non recourse state. But my understanding was that is was only for a non-refinanced first loan. So basically wondering since my loan is a refinance, if I do a short sale can they come after me for the amount forgiven. (not including the tax part).

It is up to the lender. With an agreed short sale I would doubt it. However it depends on the language of the short sale contract.

[debsgirl]

I think you might be confusing the term first mortgage with original mortgage. From what you wrote it appears that you did a complete refinance of the original mortgage. If that's the case then there is only one mortgage. The terms first and second mortgage are used when, let's say, someone has done 100% financing and there is one mortgage for 80% of the purchase price and then there is another - - or second mortgage for 20% of the purchase price. The term second mortgage will also be used if someone took out a HELOC (Home Equity Line of Credit) in addition to their regular mortgage.