CalHFA Condo Walk w/ Immediate Move Story

[stuckinsandiego]

Here is my official walk story for those who are interested in a CalHFA walk that wants a quick foreclosure (no "hamster wheel").

In summary, our 640sq ft San Diego condo that we bought in March 2006 was no longer safe or reasonable for us and our 2 year old to live in, and after a Short Sale and Loan Mod attempt and denial, we decided to walk.

1st- CalHFA - $220k IO until April 2011
2nd - CalHFA - $15 silent 35 years
3rd CalHFA - $8k silent 35 years
4th - Local city housing group - $22k
5th - Local city housing group - $10k silent until March 2011

Payment was $1720 (with insur. and HOA), April 2011 it would have been $2200
Underwater - About $200k

Our justification for a short foreclosure and immediate move is due to security clearance issues with my husband's job. Long story short, if we needed to move because of safety issues, we needed to do so quickly. Staying "rent free" would reflect negatively upon review if it came to that.

So we moved to a rental home an hour away mid March and updated our billing addresses with everyone EXCEPT CalHFA (remember this for later).

[stuckinsandiego]

1st missed payment was March 2011. Phones calls started around March 16th. We switched our account to a Google Voice number prior to the missed payment and that was the only number they called. They called once a day (except Sundays), and I let them all go to voicemail. They left about 3 messages stating to call them back regarding an important business matter.

We sent them a letter March 28th stating no further payments would be made, start the foreclosure proceedings immediately and to ceist and deist all phone calls. The calls stopped on March 30th. Around that time, we got a pink notice in the mail (forwarded from our old address) stating our account was past due.

April 8th we got some more mail. One was a forward from our old address. Just a standard letter about one of our silent loans they send every year so you don't forget about them.

The second was a larger envelope addressed to our NEW address. We had never given this to them, so I imagine they got it from our credit report. Side note: Once I updated our mailing addresses with our credit card companies, my free AAA credit monitoring service sent me an email stating there was new information on my report. It showed the new address, so this is the only way I think they could have gotten it.

The letter said we had until May 4th to get current or they would take further action. Also enclosed was a loan modification packet. Funny how it didn't mention we obviously moved, therefore we broke the mortgage agreement anyway.

Today we got notice that a certified letter was waiting for us at the post office. I will update Monday and let you know what it says.

[Screwed11]

Thank you, thank you, thank you for posting this thread. I have the same loans as you do - one loan with CALHFA and multiple silent loans with the local City. I have yet to come across anyone who has a municipal agency loan, so I'd be grateful to you if you could keep updating this thread as much as you can. We were supposed to default beginning in March, but had to postpone our decision as hubby's current employer only offered him a contract to hire position for 9 months, at which time he will convert to full time (and be subject to an array of checks, including criminal and credit). I can't tell you how depressed this postponement has made me, but it gives me time to get my ducks in a row.

Could you also tell me if you talked to anyone about the city loans? I am actually MORE worried about the city loans than CALHFA. The city loans would be wiped out in the event of a foreclosure, hence my concern. Plus the fact that no one else here has mentioned these... you are the one other person I now read posting about a city loan. My loans are all purchase money loans but I am still freaked out.


Thanks again for posting... will be following your story closely. Good luck and hope CALHFA forecloses fast so you can move on with your lives.

[stuckinsandiego]

Screwed - We talked with the city housing group prior to our walk. They were helping us with our loan mod paperwork with CalHFA for free b/c as they see it, it helps them to get us modified on the first so we will continue paying them (that mod was denied).

We mentioned to the guy we really just wanted to move. He said "well if you do default, at least our loans are not on your credit report. Technically we can ask for the money through a lawsuit, but we have never done that yet."

I don't know if they even can in California since it was all purchase money loans, but I am not sure about the laws in your state.

So far with two missed payments, we haven't heard anything from them. Granted the phone number they had for us is now disconnected, we still haven't received anything in the mail.

I will keep you posted on what happens.

[Screwed11]

Screwed - We talked with the city housing group prior to our walk. They were helping us with our loan mod paperwork with CalHFA for free b/c as they see it, it helps them to get us modified on the first so we will continue paying them (that mod was denied).

We mentioned to the guy we really just wanted to move. He said "well if you do default, at least our loans are not on your credit report. Technically we can ask for the money through a lawsuit, but we have never done that yet."

I don't know if they even can in California since it was all purchase money loans, but I am not sure about the laws in your state.

So far with two missed payments, we haven't heard anything from them. Granted the phone number they had for us is now disconnected, we still haven't received anything in the mail.

I will keep you posted on what happens.

Thank you.

I'm in Northern California. We are going to talk to a *big noise* lawfirm soon. They charged a $1000 retainer and will bill us $400 an hour for a consultation, but we need peace of mind. I don't think the City will report us to the credit bureaus, since they're technically "silent" but the lawsuit is my biggest fear. Our loans with them are all purchase money too... obviously, we didn't want to refinance 0% interest rate loans!

We would have paid them off for peace of mind again, but our loans with them total $270K. There's NO WAY on God's green Earth that we have or will ever have that kind of money lying around. But maybe the lawyer can help us figure this out.

Thanks again for sharing your story. I appreciate it very deeply.

[stuckinsandiego]

Screwed - I think some peace of mind would be good for you, but ouch that seems like a heavy fee for them just to review your docs with the city. But if they do determine something legal could happen, I guess it would be good to have someone on retainer. Just beware, sometimes bigger law firms have less time for their "little" clients.



One minor update - My credit monitoring just emailed me that the 30-day late for CalHFA posted 4/5

[Screwed11]

One minor update - My credit monitoring just emailed me that the 30-day late for CalHFA posted 4/5

WOW... that was quick, wasn't it? Keeping fingers and toes crossed for you that this gets over ASAP for you

[stuckinsandiego]

Update: The certified letter was just a copy of the letter from last week, stating we had until May 4th to pay the balance due or else further action would be taken. It also had a loan mod application.

[knownick]

The second was a larger envelope addressed to our NEW address. We had never given this to them, so I imagine they got it from our credit report. Side note: Once I updated our mailing addresses with our credit card companies, my free AAA credit monitoring service sent me an email stating there was new information on my report. It showed the new address, so this is the only way I think they could have gotten it.

Ever seen a letter with "Address Service Requested" on the envelope?

Forwarding your mail via the post office is _not_ a private matter. In fact, the post office will send notification of your new address to anyone who requests it. This is almost certainly how they got it, although the credit report is a possible avenue as well.

[stuckinsandiego]

Ever seen a letter with "Address Service Requested" on the envelope?

Forwarding your mail via the post office is _not_ a private matter. In fact, the post office will send notification of your new address to anyone who requests it. This is almost certainly how they got it, although the credit report is a possible avenue as well.

Ohhhhh I never knew that. Thanks for the info!

[Screwed11]

Update: The certified letter was just a copy of the letter from last week, stating we had until May 4th to pay the balance due or else further action would be taken. It also had a loan mod application.

Think they are moving this fast because they know that you have moved out of the condo already. Do you plan to respond to this mailing at all? Or just ignore them completely?

Also, did you hear anything at all from the City?

I also have an update of sorts to post about. I just found out that my neighbor (who bought his house about 10 days before I did, also through CALHFA) had lost his job right around the time that we did. We were talking over the fence this morning, and he told me that he does not know how much longer he would be able to keep up with the mortgage ...

I did not tell him our plans and he did not come out and say it outright, either, but just the way he kept turning back to look at his house gave me the eerie feeling that he may be going into foreclosure soon, too. We are a small sub-development of 10 homes, and if two of us are planning on defaulting, then I can only barely imagine what that would do to the values of our other neighbors' properties.

Not that I care. Some of them are trash, and one of the main reasons that we're moving, in the first place. Good luck to them once the Section-8ers come crashing into their midst. Birds of a feather... and all that jazz, you know.

[stuckinsandiego]

Haha ya I wouldn't worry about the other neighbors. You are doing what is best for you, not them. If you do speak with your neighbor again, I'd encourage him to get help from calHFA. It seems like the government money they got is only going towards people who have been laid off. There is an unemployment payment program, he should check it out. Those are the only cases I have heard where they approved funds.

Still haven't heard a peep from the city. They should have our cell #'s on file so if they wanted to call they could.

I don't think they are moving "fast" yet, I am two payments late so sending that type of letter seems standard. I imagine a notice to accelerate would come next in May after I miss this deadline. I already sent my letter stating no further payments would be made so there is no need to respond.

[stuckinsandiego]

Still nothing from the city.

Received another copy of the same letter and loan mod packet today, and a notice that a certified letter is waiting for me at the post office. I am sure it is just a copy of this same letter, so I am going to let it sit there.

I got a call on our brand new phone number from a company wanting to help us "save our home," so I put our new number on the DNC list, and also went to Experian's website to opt-out of direct marketing mail, since we also have started receiving stuff from realtors.

My "cease and desist" with CalHFA is still working, my Google Voice number hasn't received a call since the end of March.

[Screwed11]

Still nothing from the city.

Received another copy of the same letter and loan mod packet today, and a notice that a certified letter is waiting for me at the post office. I am sure it is just a copy of this same letter, so I am going to let it sit there.

I got a call on our brand new phone number from a company wanting to help us "save our home," so I put our new number on the DNC list, and also went to Experian's website to opt-out of direct marketing mail, since we also have started receiving stuff from realtors.

My "cease and desist" with CalHFA is still working, my Google Voice number hasn't received a call since the end of March.

LOL. My Google voice number is already on the DNC ... what can I say except that I can be *very* proactive when I need to be?

I have only one loan with CALHFA, but am wondering about your situation since you have a total of three loans with them. I've been reading this forum for months now but I'm just so confused these days. Do you know what would happen when they foreclose and wipe out their second and third loans? Don't want to scare you or anything, but I'd want to make doubly, triply sure that they can't pursue me for the delinquent second and third post-foreclosure. You're probably going to be fine... right?

Please keep posting... really, really, really want to know what the City does once they FINALLY realize that you are determined to let the house go. TBH, the City is the one I'm concerned about... CALHFA is nowhere near my top-10 nightmare-inducers.

[TomEason]

stuckinsandiego & Screwed11
Please forgive me for intruding on your private thread. I can't help but offer this info. You both seem unclear on whether your city loans are non-recourse. Consulting with an attorney is OK, but the lawyer will cite Cal CCP Section 580(b) and charge you a bunch of $$ for doing so. No mortgage loan can be enforced that contravenes CA statute. You can have an expert pretend to examine the note and trust deed, but if those docs contain any clause which violates CA statutes, it's unenforceable. It's easy to download and read the statute for yourselves. If all your loans, as you indicate, are purchase money loans, then they are non-recourse. And since all foreclosures in CA for small residential loans are non-judicial trustee sales, the junior loans will be wiped out in a foreclosure by the 1st, and there is no recourse. The junior lender loses. Good luck to you both.

[stuckinsandiego]

Just a small update for Screwed's sake:

Finally received a letter from the city stating our loan was in default and we needed to get current immediately or they would take further collection action. They also sent reminder bills with all the late fees tacked on.

As tomeason stated, I am not worried about them coming "after me" since it was all purchase money loans. I could send them a letter similar to what we did with CalHFA stating we are moving and are no longer going to make payments, but then again I am sure they have figured this out by now.

I am looking forward to a NOD coming later this month after CalHFA's 5/4 deadline to get current passes. Lets see what happens. I really don't want to keep paying the HOA.

[Screwed11]

Just a small update for Screwed's sake:

Finally received a letter from the city stating our loan was in default and we needed to get current immediately or they would take further collection action. They also sent reminder bills with all the late fees tacked on.

As tomeason stated, I am not worried about them coming "after me" since it was all purchase money loans. I could send them a letter similar to what we did with CalHFA stating we are moving and are no longer going to make payments, but then again I am sure they have figured this out by now.

I am looking forward to a NOD coming later this month after CalHFA's 5/4 deadline to get current passes. Lets see what happens. I really don't want to keep paying the HOA.

Hey, thanks for updating, Stuck. Wow... the City threatens to take further collection action, huh? Probably means a lot of collections calls and / or threatening letters, but at this point of time, I'm sure that you really could not care less.

Hope CALHFA moves fast on you guys and gets this show on the road. Good luck -- sending lots of positive vibes your way :-)

[stuckinsandiego]

60 day late was posted by CalHFA 5/5/11

Haven't heard anything recently from CalHFA or the city.

[Screwed11]

60 day late was posted by CalHFA 5/5/11

Wow... they seem to have their eyes on the ball, huh? Good for you...maybe they'll move in ASAP.

Haven't heard anything recently from CalHFA or the city.

Not a peep from the City? You watch your back around them, girl. You never know. As a friend of mine put it, "Don't you try to screw around with the government because the one who'll end up getting screwed is you. The big, bad, government has long hands and good reach." Not trying to scare you or anything, but you never know.

I'm trying to make discreet inquiries into whether the City has previously sold its housing loans to shady debt collectors for pennies on the dollar, and so far the answer seems to be a big, fat, NO. But the odds are, given my luck, that they'll start with me. I'm actually seriously considering the nuclear option. Funny how NOTHING seems to scare you after a while.

[5284CA]

Screwed,

I'm not sure why you care at all about what the city or CalHFA think or want...they cannot do anything to you, nothing. I am familiar with your story as I am sure many others are, your loans are CA purchase money non-recourse, which means no one who stands to be paid by you can collect anything from you but the property, no matter if it is a bank, the government, the president, nobody and no matter how many people stand in line, there is nothing they will ever be able to get from you beyond repossessing the property.

I hate to be cynical here, but you are a number to them, one of several numbers who are not paying on a loan, all they want to do is move you through the system, write you off their books, and be done with you just like you want to be done with them. You could have $100 million in your bank account and send them a statement everyday showing all the interest you made and how it probably equals more than your monthly payment due and they still cannot get anything form you but the house.

There is no conspiracy, from the government or the bank, to get you...there is no debt collection agengy that would ever buy your junior loans from the city because they know they cannot get anything from you.

I worry that your paranoia might scare someone who should walk for fear of what you are continuously speculating about. I understand that it is a personal decision that everyone should make, but please lets all try to be sure that information that is given on the board is fact based and correct and we stick to laws and facts or at least legitimate questioning when talking about banks going after individuals...you however, I know have been told on numerous occassions by numerous posters that you, are free and clear but yet you continue to bring up these conspiracy theories of how the city or the bank is going to target and hunt you down for what you are doing. I understand that could be a valid concern but, by know with all the laws presented to you, you should know you have nothing at all to worry about.

[Screwed11]

There is no conspiracy, from the government or the bank, to get you...there is no debt collection agengy that would ever buy your junior loans from the city because they know they cannot get anything from you.

I wish this were true, but can you explain why it is that there *are* banks that are selling non-recourse, purchase money loans in CA to collection agencies?? Please don't tell me that there are NO banks that are doing this, because, on this very board, we've discussed collection agencies not only buying up these loans but also suing former home owners for fraud (as a work-around the non-recourse laws), so this is happening.

I worry that your paranoia might scare someone who should walk for fear of what you are continuously speculating about. I understand that it is a personal decision that everyone should make, but please lets all try to be sure that information that is given on the board is fact based and correct and we stick to laws and facts or at least legitimate questioning when talking about banks going after individuals...you however, I know have been told on numerous occassions by numerous posters that you, are free and clear but yet you continue to bring up these conspiracy theories of how the city or the bank is going to target and hunt you down for what you are doing. I understand that could be a valid concern but, by know with all the laws presented to you, you should know you have nothing at all to worry about.

Wow, to what do I deserve this?

[TomEason]

I wish this were true, but can you explain why it is that there *are* banks that are selling non-recourse, purchase money loans in CA to collection agencies?? Please don't tell me that there are NO banks that are doing this, because, on this very board, we've discussed collection agencies not only buying up these loans but also suing former home owners for fraud (as a work-around the non-recourse laws), so this is happening.
Wow, to what do I deserve this?

Screwed11
Thanks for your post. Forgive me for saying this, but your post bespeaks of your being somewhat paranoid about all this. I assume you've sought counsel from an experienced consumer advocate lawyer or foreclosure defense lawyer, or if you're concerned about a lender coming after you for fraud, a criminal defense lawyer. If not, you might consider it. If I were you, I'd forget about any risks you might be imagining. Good luck.

[5284CA]

Wow, to what do I deserve this?

I tried to state exactly in the statement why I was telling you this but I will try again. I am fearful that the fact you keep bringing up that banks and cities will come after defaulters when they are not legally entitled to may give some who are looking for accurate information the wrong idea. This site is so great because it is based in questions being answered by law and fact and allowing people to make informed decisions for themselves based on those aspects. If a bank does sell to a collection agency there is still nothing they can do in this instance and if they try it will be fruitless. I would just hope the site does not get filled with speculation of what might happen especially when we already know by the letter of the law what will happen.

[TomEason]

Screwed,

I'm not sure why you care at all about what the city or CalHFA think or want...they cannot do anything to you, nothing. I am familiar with your story as I am sure many others are, your loans are CA purchase money non-recourse, which means no one who stands to be paid by you can collect anything from you but the property, no matter if it is a bank, the government, the president, nobody and no matter how many people stand in line, there is nothing they will ever be able to get from you beyond repossessing the property.

I hate to be cynical here, but you are a number to them, one of several numbers who are not paying on a loan, all they want to do is move you through the system, write you off their books, and be done with you just like you want to be done with them. You could have $100 million in your bank account and send them a statement everyday showing all the interest you made and how it probably equals more than your monthly payment due and they still cannot get anything form you but the house.

There is no conspiracy, from the government or the bank, to get you...there is no debt collection agengy that would ever buy your junior loans from the city because they know they cannot get anything from you.

I worry that your paranoia might scare someone who should walk for fear of what you are continuously speculating about. I understand that it is a personal decision that everyone should make, but please lets all try to be sure that information that is given on the board is fact based and correct and we stick to laws and facts or at least legitimate questioning when talking about banks going after individuals...you however, I know have been told on numerous occassions by numerous posters that you, are free and clear but yet you continue to bring up these conspiracy theories of how the city or the bank is going to target and hunt you down for what you are doing. I understand that could be a valid concern but, by know with all the laws presented to you, you should know you have nothing at all to worry about.

5284CA
Thanks for this post. It is very well stated and I agree completely!

[Screwed11]

I tried to state exactly in the statement why I was telling you this but I will try again. I am fearful that the fact you keep bringing up that banks and cities will come after defaulters when they are not legally entitled to may give some who are looking for accurate information the wrong idea. This site is so great because it is based in questions being answered by law and fact and allowing people to make informed decisions for themselves based on those aspects. If a bank does sell to a collection agency there is still nothing they can do in this instance and if they try it will be fruitless. I would just hope the site does not get filled with speculation of what might happen especially when we already know by the letter of the law what will happen.

All I have been saying is that some banks are still selling non-recourse, purchase money loans to debt collectors, who then proceed to harass the former homeowners. This is a fact, not an opinion or a speculation. I do not understand why stating this fact is so inappropriate. The fact that they won't see a dime is a different story and most homeowners - especially the ones on this forum - are well aware of it. But this does not mean that it prevents or completely circumvents harassment. I am just amused that you think I am scaring other potential walkers away... I am talking only about me, and my concern over my junior loans, simply because of the amount involved. Nothing more, nothing less.

Anyway, I appreciate your feedback and your concern that I may be potentially dissuading other homeowners from walking. I think the chances of that happening are non-existent, at best, especially since there are many, many, many California threads here from more experienced folks that do the exact opposite, and also the fact that most people here know that I, myself, despite my apparent paranoia, am walking! Speaking of helpful California threads, you are one of the posters that I respect very much especially since your thread documenting your walk was one of the few that really helped me make up my mind to throw in the towel, despite the obvious fear and stress I feel about all this. So, anyway, thanks again for that thread ... I'll probably have a lot of questions for you soon once I get my own show on the road.

@Tom... it's lets-bash-Screwed11-day at your place today, eh?

[5284CA]

All I have been saying is that some banks are still selling non-recourse, purchase money loans to debt collectors, who then proceed to harass the former homeowners. This is a fact, not an opinion or a speculation. I do not understand why stating this fact is so inappropriate. The fact that they won't see a dime is a different story and most homeowners - especially the ones on this forum - are well aware of it. But this does not mean that it prevents or completely circumvents harassment. I am just amused that you think I am scaring other potential walkers away... I am talking only about me, and my concern over my junior loans, simply because of the amount involved. Nothing more, nothing less.

Anyway, I appreciate your feedback and your concern that I may be potentially dissuading other homeowners from walking. I think the chances of that happening are non-existent, at best, especially since there are many, many, many California threads here from more experienced folks that do the exact opposite, and also the fact that most people here know that I, myself, despite my apparent paranoia, am walking! Speaking of helpful California threads, you are one of the posters that I respect very much especially since your thread documenting your walk was one of the few that really helped me make up my mind to throw in the towel, despite the obvious fear and stress I feel about all this. So, anyway, thanks again for that thread ... I'll probably have a lot of questions for you soon once I get my own show on the road.

@Tom... it's lets-bash-Screwed11-day at your place today, eh?

I understand what you are saying thank you for eloborating and I am very happy to hear that my experience has helped you. the inital read of your post which I commented on was very broad and did not include information for those who may not be as well versed in non-recourse loans, that is why I wanted to clarify that. I have not personally read of collection agencies buying loans (non-recourse) they know they cannot collect on, and still cannot understand why they ever would. Buit as I said, in the initial reading of the post I commented on I did not think it was clear that they had no right to come after you.

As I read through posts on the board, I always try to read through as if I do not know any info so that I am reading as those who are new to the site or do not know the law are reading then interpret it how they might. In the initial reading of the post, if I were new here and read that I would have been very worried that no matter my loan I would be harrassed and eventually have to pay someone for a the loan I am defaulting on.

Thank you again for clarifying...it is much more clear to me now what you were trying to communicate.

[stuckinsandiego]

So back on subject.....

My Citibank credit card (for 76 Conco Philips gas) just called me with a weird message. Looked up online and they lowered my credit allowance to $310. Since I just use this for gas (b/c I get 4% cash back) this isn't a big deal.

Checked my others and there was no change except BoA - they actually raised my limit, which they have't done in 10 years. Weird.

[Screwed11]

So back on subject.....

My Citibank credit card (for 76 Conco Philips gas) just called me with a weird message. Looked up online and they lowered my credit allowance to $310. Since I just use this for gas (b/c I get 4% cash back) this isn't a big deal.

Checked my others and there was no change except BoA - they actually raised my limit, which they have't done in 10 years. Weird.

Wow, that's strange that BOA would raise your limits... by how much did it go up? Also, have you checked your credit score recently, Stuck?

[underwater_vallejo]

BofA actually was the most vicious of all the lenders, in my case. Even though we actually have a couple of checking accounts with them, they systematically reduced my credit limit as I paid down my balance. I did at some point transfer all of my balances onto my BofA card thanks to a 0% balance transfer offer, but it was only a matter of months before they dropped my limit to within a $1000 of my balance. After 6 months of paying down $500 a month, they dropped my limit another $3000.

In my case, Chase was the coolest. I had a $37K limit with them and I still have that exact limit with them. In fact, I eventually pulled my total credit card balance ($14K) back onto my chase card since they're giving me 0% for the next 12 months. Even with the $500 transaction fee, that's win-win for me.

[stuckinsandiego]

My Boa has been $9500 since I got it, but it was upped to $10k. I really don't want to lose it b/c they still have me at a promotional 5.9% int that I got when I originally signed up as the eBay credit card 10+ yrs ago. It was supposed to rise but it never did.

However I don't have a balance, so may cancel it all together. Since we put so much on all 3 of our credit cards buying stuff for the new house and the move, I ended up taking a loan from my 401k to pay them all off. The amount of interest I'll pay on the loan in 4 yrs total is what I would have paid in 4 months of interest with the CCs, so it was a better economic decision.

---

On to credit score, I checked credit karma and my transrick is 709, my vantage score is 681. I'm not sure which is closest to a true FICO, but when we got our auto loan in Oct my score was 780.

[Screwed11]

Stuck, a quick question: Are your silent seconds with CALHFA also being reported by them as being in default, or are they only reporting the first loan as being in the red?

BTW, I was told that the Credit Karma score is the closest to FAKO. And, btw, that's not bad drop, is it? Personally, I'd be glad to get out from under this mess with a score in the mid-600s, especially if we won't have any other need / use for credit for at least a few years. I am wondering if taking out an auto loan and being current on it while being in default on the mortgage will help our FAKO a bit? We're currently in the market for a new mini-van, and we're timing its purchase to be in the exact same month that we first miss our mortgage payment. The hope is that all those reds will be offset a teeny-tiny-wee-bit by that one good.

[stuckinsandiego]

Just the main loan is on our credit report, so that is the only thing being reported as late. The two silent loans, and the loans with the city, are not reported.

[Exit Strategy]

Screwed,

I'm not sure why you care at all ...they cannot do anything to you, nothing. .

Unless they pursue a judicial foreclosure. Right?

Let's say the banks have one of their smartguy computer wiz kids pull up your bank accounts (legally or illegally) and they see you have money. They could decide to move your file over to the judicial foreclosure desk, couldn't they?

[TomEason]

Unless they pursue a judicial foreclosure. Right?

Let's say the banks have one of their smartguy computer wiz kids pull up your bank accounts (legally or illegally) and they see you have money. They could decide to move your file over to the judicial foreclosure desk, couldn't they?

Exit Strategy
Thanks for your question. FYI, in CA, lenders NEVER use judicial foreclosures in foreclosing on small residential loans. They always use trustee sales. Why? Because they are much faster, cheaper, and not under the watchful eyes of a court.

[Screwed11]

Unless they pursue a judicial foreclosure. Right?

Let's say the banks have one of their smartguy computer wiz kids pull up your bank accounts (legally or illegally) and they see you have money. They could decide to move your file over to the judicial foreclosure desk, couldn't they?

Exit, if you have money, then may I suggest that you please consider implementing asset protections measures NOW, before you get an NOD? The reason is peace of mind. As Tom points out, your lender may never, in the history of their existence, have pursued judicial foreclosure, but if you are concerned, then you may want to proactive over this issue.

There are many *legal* ways to hide your money. A simple Google search for asset protection in California will give you many viable & practical ideas / leads on how to go about doing this. In all likelihood, on non-recourse, purchase money loans, these measures will not be required to protect your other assets from being attached by the lender to cure your deficiency. However, there's no harm in taking the time now to protect your hard-earned assets, regardless of your circumstances. It's simply an additional precautionary measure for some valuable peace of mind.

Good luck!

[Exit Strategy]

Exit Strategy
Thanks for your question. FYI, in CA, lenders NEVER use judicial foreclosures in foreclosing on small residential loans. They always use trustee sales. Why? Because they are much faster, cheaper, and not under the watchful eyes of a court.

But the point is that, under CA law, they have the right to pursue a judicial foreclosure.

I'm not an expert, but at some point it may become cost effective for banks to start looking at jud. FCs, since we are nowhere near the end of FCs in CA.

Make sense?

[Exit Strategy]

Exit, if you have money, then may I suggest that you please consider implementing asset protections measures NOW, before you get an NOD? The reason is peace of mind. As Tom points out, your lender may never, in the history of their existence, have pursued judicial foreclosure, but if you are concerned, then you may want to proactive over this issue.

There are many *legal* ways to hide your money. A simple Google search for asset protection in California will give you many viable & practical ideas / leads on how to go about doing this. In all likelihood, on non-recourse, purchase money loans, these measures will not be required to protect your other assets from being attached by the lender to cure your deficiency. However, there's no harm in taking the time now to protect your hard-earned assets, regardless of your circumstances. It's simply an additional precautionary measure for some valuable peace of mind.

Good luck!

Question: If, as this site avers, a primary "purchase money" non-recourse loan in CA is secured by the house and the house alone, what right would the banks have to my other assets? Or are you saying that they could claim the other assets in the course of a judicial foreclosure?

[Screwed11]

Question: If, as this site avers, a primary "purchase money" non-recourse loan in CA is secured by the house and the house alone, what right would the banks have to my other assets? Or are you saying that they could claim the other assets in the course of a judicial foreclosure?

All I'm saying is that there are *no* guarantees in life. We don't have a crystal ball to gaze into and predict what the bank will do when you go into foreclosure. Maybe, as you speculate, they will run your numbers, determine that you are, in fact, "loaded", and opt to go the judicial route in your case. In this case, astute asset planning would have been valuable to you because had you done so, the bank's financial check on you would have turned up nothing (since you've hidden your assets) and you could have held on to your possessions with a little planning and foresight.

Or maybe, as 99.99% of other foreclosures on residential properties go, they will go the non-judicial route, and be out of luck if a deficiency results after the foreclosure. If so, then asset planning is still no skin off your nose.

There are also other situations in life - such as becoming involved in civil litigation etc - where smart, proactive asset protection measures will come in very helpful. My post was intended as merely a suggestion to you as I am, personally, a rabid advocate of asset protection measures. I did not, in any way, intend to give you the impression that the bank has any right to any of your other assets, in the event of a non-judicial foreclosure on purchase money loans of primary residences in California.

[TomEason]

But the point is that, under CA law, they have the right to pursue a judicial foreclosure.

I'm not an expert, but at some point it may become cost effective for banks to start looking at jud. FCs, since we are nowhere near the end of FCs in CA.

Make sense?

Exit Strategy
Thanks for your question. How could it ever be more cost effective for a lender to do do a judicial foreclosure, unless the loan is large and is secured by something like a commercial building or large multi-unit apartment building? Court supervised judicial foreclosures are both slow and expensive, with no guarantee of success. Whereas, lenders all love trustee sales because they're cheap, fast and not court supervised.

As for your question about a CA purchase money loan, the borrower is fully protected under the provisions of Cal CCP Section 580(b).

[Exit Strategy]

Thanks, as always, Tom.

What I was thinking was that, if the sheer volume of FCs rises to a certain point, they may find a way to make it cost effective. After all, other states are doing it every day per their state law.

So, do I need "asset protection" in my strategic default if I have assets other than the house and/or cash? I'm thinking your answer will be "No, you don't need it in a non-judicial FC."