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  1. #1
    Join Date
    Feb 2009
    Posts
    1

    Unhappy How to Determine if a Second Loan is a Purchase Money Mortgage

    My question involves a foreclosure in the State of: California

    I have an 80/20 first/second loan structure, nothing down, interest only. Both loans were for the sole purpose of purchasing the home I live in and I have not refinanced the loans. Are they both considered purchase money loans under CA law? Is it true that both loans are non-recourse, so that if I'm foreclosed upon the lenders cannot come after me for the difference between what's owed and what the house eventually sells for?

    It looks like I'm upside down by about $100 to $150 K, and I'm trying to understand all my options and ramifications thereof. Thank you.

  2. #2
    Join Date
    Apr 2008
    Location
    Texas (Dallas area)
    Posts
    1,404

    Default Re: How Can I Be Sure My 2nd Loan is Purchase Money

    Quote Quoting larlong
    View Post
    My question involves a foreclosure in the State of: California

    I have an 80/20 first/second loan structure, nothing down, interest only. Both loans were for the sole purpose of purchasing the home I live in and I have not refinanced the loans. Are they both considered purchase money loans under CA law? Is it true that both loans are non-recourse, so that if I'm foreclosed upon the lenders cannot come after me for the difference between what's owed and what the house eventually sells for?

    It looks like I'm upside down by about $100 to $150 K, and I'm trying to understand all my options and ramifications thereof. Thank you.
    Yes the second loan is a non recourse loan if it was used as purchase money along with the first to purchase the property. If it was never refinanced and never modified you are in the clear.

    Here is a link to CA foreclosure laws;

    http://stopforeclosure.com/Californi...losure_Law.htm

  3. #3
    Join Date
    Feb 2009
    Posts
    3

    Default Re: How Can I Be Sure My 2nd Loan is Purchase Money

    Does this work the same way in Michigan?

  4. #4
    Join Date
    Apr 2008
    Location
    Texas (Dallas area)
    Posts
    1,404

    Default Re: How Can I Be Sure My 2nd Loan is Purchase Money

    Quote Quoting shelley77
    View Post
    Does this work the same way in Michigan?
    No, not at all. Please start your own thread.

    This is California law. Michigan law is opposite.

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