California Anti Deficiency Laws

[StartingOver08]

You are welcome!

In a case like yours, you have a first mortgage, but it was refinanced for a larger amount sometime after the original purchase and that is the only reason why it is not considered a purchase money mortgage. Even if it was refinanced for exactly the same amount (to get a lower interest rate for example) it still would not be a purchase money mortgage. You can only have a purchase money mortgage when you acquire the property.

If you attempt a deed in lieu (which is a really good idea) use a good real estate attorney and have him negotiate NO DEFICIENCY JUDGMENT in exhange for the deed with the lender. You have a better than normal chance because you only have one loan. But, who knows what your lender will take? It is worth trying.

[TeacherMomma]

But, who knows what your lender will take? It is worth trying.

What they will take in terms of what? With a deed in leiu don't you just say "here"? LOL No really - we didn't have money for an atty in our BK we sure as heck don't have it now for a deed. Aren't there teplate letters somewhere to ask the lender for this option?

[StartingOver08]

The lender is not obligated to take your "Deed in Lieu of Foreclosure".

You would want to make sure that if they do take it, they will also indemnify you against any deficiency (including a deficiency judgement against your MIL I would think).

Otherwise, why would you do a deed in lieu? There would be no benefit to you other than getting it out of your name a little quicker.

As to a template, I don't know if there is one on the net....maybe JustBroke or HHM or MSBKLawyer or any of the other attorney's that contribute here would have an idea...

[Widdle]

Deed in Lieu Template

TeacherMomma........go to your lenders website.....I vaguely remember seeing a Deed in Lieu form posted on several different lenders sites when I was researching mod info for my brother, daughter in law and a neighbor.


Wells Fargo, HomeEq and NationStar are the lenders.

[Widdle]

Deed in Lieu Template

http://www.loansafe.org/forum/deed-l...elp-walk-away/

I don't know if this is allowed, but, the above link may help.

[Widdle]

Deed in Lieu Form (pdf)

http://www.firstam.com/ekcms/uploade...s/form6(1).pdf

[StartingOver08]

I would have a problem signing that if it were me....especially since it requires you to indemnify the lender against all costs, fees etc (look at page 10, paragraph 6.05). JMO.

[TeacherMomma]

We are gonna keep trying to work it out with our lender.....we'll see....they may give us no choice but to walk and take the chances.

[hereforinfo]

I think you are going to have issues regardless of what they do. They may go after your MIL for the deficiency. If they don't pursue it, the amount will have to be regarded as "forgiven" and they are required to send a 1099. That wouldn't be much of a problem for your husband if he's insolvent. But what about your MIL? Does she have assets? She could potentially have to pay income tax on some of the forgiven amount. I don't think she would even be protected by the Mortgage Debt Relief Act since this is not her primary residence. You really need to consult with a very good CPA before proceeding with this.