Ask your Questions below.
-John McConnin has been answering short sale questions on the net since June 2007.
-The California Association of Realtors selected him to train Realtors on Short Sale and legal options for their 2010 conference in Anaheim California.
-Earned his Juris Doctorate from University of San Diego School of Law in 1991.
- Licensed as Attorney and Real Estate Broker in CA (Attorney since 1991, Broker since 2003)
- McConnin & Company Realty has two agents who have closed over 100 short sales each.
- As an attorney he as advised on and or negotiated hundreds of loan workouts and strategic defaults
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JohnMcConnin recently posted..Ask a Short Sale Attorney (TM) – Short Sale Strategy
HELOCs and short sale question
This is offically no fun. Our short sale recorded (date withheld). I had reassurances for multiple people that our purchase money HELOC from Chase was non-recourse. (Not from any laywer in writing though) Now their collection company, (name withheld for privacy reasons), is calling. They say because we didn’t foreclose that we are not protected. I don’t see anywhere in CCP 580b that seconds are excluded. Have you seen any case law yet?
Great Question.
We will answer the question as if the real estate was located in California. Prior to any short sale or any legal analysis you must be aware of which states laws govern the transaction.
1. If your short sale closed on a California Residence after July 15th 2011. I will create a separate post. CCP 580e has changed the way second lenders are doing business and it is not good for many homeowners with recourse second loans.
2. If your short sale closed before July 15th 2011, in Calfornia, you have an interesting question.
a. If you have non recourse loans, you may argue that there is California case law which says that a homeowner may not waive their CCP 580b protections after the fact. That case involved Bank of America and loan modification so it is not directly on point… but there is a reasonable chance that line of reasoning would be applied to short sales.
b. If you had a recourse second loan, you might be able to argue that when the second took money and released their lien that was their one action under California law. See the One Action Rule.
c. You should also carefully review your approval letters to see if you were released from not only the lien but also the note or the loan. And even in your case if the lender released the Mortgage… that ambiguity may be good for you. Note I am also a licensed attorney in Florida. In a Mortgage Theory state like florida the mortgage is similar to the lien not the loan. However, in California you may argue that people in the industry refer to the note as a Mortgage.
In summary, it would be your job to find reason why you were not only released from the lien but also the remaining loan balance.
Finally, as a attorney I must mention one more thing. This was a secured transaction involving very complex web of laws. Professional Realtors who care about your future would never advise you about the legal ramifications of release documents. Professional Realtors have attorneys on their team, to protect your interests.
Question / Comments: Rented out San Diego home 12/09, moved out of state state, bought home there.
San Diego home worth 700-750K.
Owe 518K on refi-1st and 228K on HELOC (ETrade) and have stopped paying.
I have a skilled selling agent and short sale negotiator working for me. The SS negotiator says I am a hardship case and ETrade is very likely to accept getting about 50%. However, I am still worried about protecting my assets just in case. I am retired now and any more losses could leave me homeless. I even need to downsize from here and am considering paying 195K cash for a small home to get my expenses down to match income.
I really need to know if this is a wise thing to do. My SS negotiator cannot really tell me.
we will answer this question
http://underwaterrealestate.com/california-two-step-short-sale/