QUESTION
Is it correct that once the mortgage company has your property they can't come after you for money?
Asked on Nov 25th, 2015 on Estate Planning - California
More details to this question:
My sister is concerned that even after a foreclosure has been finalized and it has been months or even years that a mortgage company can ask for the money owed.
3 ANSWERS
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Correct if this is your home; not true if this is a rental or some other property you own but don't reside in. Deficiency judgments are not allowed California against home owners.
Answered on Dec 07th, 2015 at 5:08 PM
If it is a first mortgage in an owner occupied home she is correct.
Answered on Dec 07th, 2015 at 5:07 PM
If the home is in California, the anti-deficiency statute gives you only one cause of action for failure to pay a mortgage. If the lender uses private foreclosure [sells the property at a public sale] that wipes out the debt. But if you also took out another loan from that particular lender [such as a home equity loan which can be deemed as a totally separate loan secured by more than your house], that second loan may not be wiped out.
Answered on Dec 07th, 2015 at 5:07 PM