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  1. #1

    Default Foreclosure V. Short Sale in California

    My question involves a foreclosure in the State of: California

    I am deeply grateful for any advice.

    Foreclosure (Trustee) Sale is scheduled for Aug 30th. The property is burdened by $400k in debt: a combination of a 1st DOT (not sure if purchase-money or recourse) and a line of credit. It's current market value is $275k (down from $500k in 2007). The bank's Opinion of Value / Appraisal is $290k.

    I have been trying to short-sell for 4 months, and finally have a qualified buyer for $275k. The lender has agreed to postponing the auction to allow the short-sale go through, but is requesting me to sign a promissory note for $15k.

    I own a small commercial property in the state free and clear of all liens, which I had paid $400k for, and is now worth $300k.

    (1) Why should I continue with the short-sale, instead of just letting the trustee sale go through (other than my real estate agent insisting on the former)?

    (2) Will my other property be in jeopardy, or can my wages be garnished in the future for the default?

    (3) I have been in default for almost a year, but have been paying my HOA dues of $250/mo. until last month. Should I continue paying the dues until the property sells, or otherwise notify the HOA of my inability to make payments?


    Thank you!

  2. #2
    Join Date
    Jan 2006
    Posts
    38,867

    Default Re: Foreclosure V. Short Sale in California

    well, first you need to determine if the lender will be able to seek a judgment for any deficiency if the home is foreclosed and sold at less than the mortgage due.

    If not, then obviously, your money is safe but you will have a foreclosure on your credit report. Not a good thing,


    If you do go the short sale route, you will be clear of the mortgage and there will be no chance of a suit to recover the deficiency.

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