I am in a weird situation. I live in california. My house was foreclosed(non-judiciary) back in november. It was my primary residence, and I had 2 loans
(80/20). Both the loans were sold to Citi mortgage by the original loan company months after I bought the house.
Just before the real estate melt down, I paid 10% off the second loan and in the process, refinanced the second loan to a better interest rate with the same bank (citi).
So now I had 2 loans (80/10) where the second was now a refinanced loan, but both loans still with the same bank.
I lived in the house for over 5 years, before Citi foreclosed it.
Citi gave me a letter stating that the second loan was forgiven months before the foreclosure and told me that I do not require a 1099C.
Just before foreclosing, they sold my first loan to Saxon (which I believe is also a subsidiary of citi), who actually foreclosed the house.
Recently I got a letter from some collection company who claim to be helping citi mortgage to collect the unpaid debt.
My few concerns:
1. Is second loan a re-course or a non recourse loan. If I did not take the money out of the house, but refinanced with the same company, should it not be
treated as a non-recourse loan.
2. Can the collection company come after me for the loan deficiency.
3. Should I contact the collection company. The letter they sent out says that if I do not dispute the validity of the debt, I am assuming that the debt is valid.
3. Am I not protected under Simon v. Superior Court (Bank of America) (1992) 4 Cal.App.4th 63 law. Citi just before foreclosing selling to loan to Saxon hopefully does not disqualify me from this protection.
Please advice what do I need to do.