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  1. #1
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    Mar 2011
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    Default Collection on a Foreclosed Junior Loan from Debt Collection Company

    My question involves a foreclosure in the State of: CA

    My home loan which was refinanced into a first with a HELOC both by company A was foreclosed and sold last year. I received the 1099C on the first but the HELOC loan is still under collection attempts from a debt collection company.

    From what I could research I found that "Simon vs Superior Court" should apply and that I should not owe on the HELOC since both loans were owned and serviced by the same company.

    My question: If Company A sells the HELOC to a debt collector prior to foreclosing does this circumvent the "Simon vs Superior Court" ruling thus making legal action against me a possibility for the debt collector.

    Thank you for your input,

  2. #2
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    Default Re: Collection on a Foreclosed Junior Loan from Debt Collection Company

    Was this a judicial foreclosure?

  3. #3
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    Mar 2011
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    3

    Default Re: Collection on a Foreclosed Junior Loan from Debt Collection Company

    Non-judicial foreclosure.

  4. #4
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    Default Re: Collection on a Foreclosed Junior Loan from Debt Collection Company

    Then I agree; from what you've told us it would seem that the right to a deficiency on the HELOC should have been extinguished. (A lender holding both senior and junior liens on the same property could preserve the right to a deficiency judgment under a junior lien by electing judicial foreclosure of the senior lien.)

  5. #5
    Join Date
    Mar 2011
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    3

    Default Re: Collection on a Foreclosed Junior Loan from Debt Collection Company

    Thank you for your response, any thoughts on them selling the loan to a debt collector prior to foreclosing. Would this change the outcome?

    Also does this still apply if this was not the original purchase money loan but a later refinance?

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