580B purchase protection questions - Loan Modification Forum

overallthisbs · 04-21-2009, 04:23 PM

I posted this in the lawyer forum as well but wanted to post it here as well as I know there are lots of talk about 580b here, thanks for the help.......

I have done lots of research and I am 99.9% sure that we are convered by the CA statute 580B purchase money protection. We are planning on walking away from our home, it is over 50% underwater now from the purchase price. We have a first and a second, 80/20 loan done at the time of purchase. Owner occupied. Never refied, the 2nd heloc was only used to purchase the house, never any $ pulled from it. I dug up my loan papers and even the papers for the 2nd clearly state in the title "broker purchase loan".

I met with a BK lawyer the other day and he reccomended that I consult with a RE attorney to make sure that the 2nd is purchase $ protected. From everything I have read and found shows that the bank will not be able to come after us for any deficiency judgement in the future as we fall under the 580B statute. The only thing they can do is take our home and ding our credit.

My question is, is it really necessary for me to meet with a RE lawyer? The 580B statute seem fairly straightforward. The only thing I could find in it is the fact that there may be some collateral involved, but that was for sure not the case with us as we didn't own anything when we bought.

thanks for the help!

The Professor · 04-21-2009, 10:18 PM

In my opinion it is necessary, and let me explain why. I fully expect that once the first lender has foreclosed, the second lender is going to attempt initial collection efforts. This is because of the concept "there is no harm in asking." Now if you have an attorney review it before that second lender comes calling, and the attorney has provided you with a written opinion as to the second's non-recourse status under CCP Sectin 580b, simply sending the second lender (or the collection agency that represents them), a copy of the letter along with an acknowledgment that your are familiar with the Federal Fair Debt Collection Practices Act, and I'm guessing you won't hear from them again.

Best to nip these things in the bud early on.

Daniel

overallthisbs · 04-21-2009, 10:36 PM

Hey Daniel, thanks for the help again. I am thinking the same thing as well. It would be nice to have a letter like that.

another question for you, what should something like this cost? maybe a range? I got one quote from a law office near me and they gave me a quote of $1500 bucks!! I have no problem paying for their time but a quick hour meeting with my docs and a letter should not cost that much. I was hoping to get this done for under $500.

Is there any resources here on the board to find a good lawyer with fair prices?

04-21-2009, 04:23 PM	#1 (permalink)
overallthisbs Senior Member Join Date: Mar 2009 Posts: 71 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	580B purchase protection questions I posted this in the lawyer forum as well but wanted to post it here as well as I know there are lots of talk about 580b here, thanks for the help....... I have done lots of research and I am 99.9% sure that we are convered by the CA statute 580B purchase money protection. We are planning on walking away from our home, it is over 50% underwater now from the purchase price. We have a first and a second, 80/20 loan done at the time of purchase. Owner occupied. Never refied, the 2nd heloc was only used to purchase the house, never any $ pulled from it. I dug up my loan papers and even the papers for the 2nd clearly state in the title "broker purchase loan". I met with a BK lawyer the other day and he reccomended that I consult with a RE attorney to make sure that the 2nd is purchase $ protected. From everything I have read and found shows that the bank will not be able to come after us for any deficiency judgement in the future as we fall under the 580B statute. The only thing they can do is take our home and ding our credit. My question is, is it really necessary for me to meet with a RE lawyer? The 580B statute seem fairly straightforward. The only thing I could find in it is the fact that there may be some collateral involved, but that was for sure not the case with us as we didn't own anything when we bought. thanks for the help!

04-21-2009, 10:18 PM	#2 (permalink)
The Professor Senior Member Join Date: Jul 2008 Location: 49er Gold Country Posts: 1,543 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	Re: 580B purchase protection questions In my opinion it is necessary, and let me explain why. I fully expect that once the first lender has foreclosed, the second lender is going to attempt initial collection efforts. This is because of the concept "there is no harm in asking." Now if you have an attorney review it before that second lender comes calling, and the attorney has provided you with a written opinion as to the second's non-recourse status under CCP Sectin 580b, simply sending the second lender (or the collection agency that represents them), a copy of the letter along with an acknowledgment that your are familiar with the Federal Fair Debt Collection Practices Act, and I'm guessing you won't hear from them again. Best to nip these things in the bud early on. Daniel

04-21-2009, 10:36 PM	#3 (permalink)
overallthisbs Senior Member Join Date: Mar 2009 Posts: 71 Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0	Re: 580B purchase protection questions Hey Daniel, thanks for the help again. I am thinking the same thing as well. It would be nice to have a letter like that. another question for you, what should something like this cost? maybe a range? I got one quote from a law office near me and they gave me a quote of $1500 bucks!! I have no problem paying for their time but a quick hour meeting with my docs and a letter should not cost that much. I was hoping to get this done for under $500. Is there any resources here on the board to find a good lawyer with fair prices?

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