When borrowers default on second homes

By -
The New York Times

When borrowers default on second homes
Strategic defaulting - where the homeowner has the ability to pay the
mortgage, but chooses to stop making payments - among affluent homeowners
with second homes and investment properties is increasing.

MAKING SENSE OF THE STORY FOR CONSUMERS

* Homeowners who strategically default are likely to find their credit
will be negatively impacted and they should expect to be prevented from
getting another mortgage loan for 7 to 10 years.
* Many homeowners are concerned about the possibility of the lender
suing for the amount of money owed on the loan when a house goes into
foreclosure. Whether or not the lender has legal justification to do so
depends largely on where the property is located.
* In "recourse" states, a lender can go after the homeowner, and
usually other assets like a primary residence, for the full mortgage amount.
Examples of recourse states include Maine, New Jersey, and Hawaii.
* In "nonrecourse" states, a lender agrees to accept whatever the
property fetches at a short sale, foreclosure sale, or deed-in-lieu, and
generally can't sue for the full loan amount. Florida, Connecticut, and
Arizona are among the nonrecourse states.
* California is in a third category called "single-action" or
"one-action," which allows the lender either to foreclosure on the owner or
file a civil lawsuit for the full loan amount. Other single-action states
include New York and Idaho.
* Homeowners should be advised that even in a nonrecourse state, those
who opt for a strategic default on a previously refinanced property may not
be protected from lenders, because the mortgage in not in accordance with a
first purchase.
* Although California is a single-action state, lenders can still sue
homeowners for repayment of a second mortgage or home equity line of credit.

Read the full story
<http://www2.realtoractioncenter.com/site/R?i=99O1w3tSBiCGGhS7YQF2RQ..>

-sunil


SUNIL SETHI REAL ESTATE

Sunil Sethi / Broker, President, REALTOR, MBA / SUNIL SETHI REAL ESTATE
38750 Paseo Padre Pkwy Suite B3 / Fremont, CA 94536
<http://www.sunilsethi.com/> www.sunilsethi.com

CA DRE#: 01173766

Comments

Post a Comment

Popular posts from this blog

Mission Lakes Neighbors Ask Union City Mayor and Council to ​Rethink East West Connector

By -
Tomorrow ​ (2/27/18)​ will be your LAST, but also BEST opportunity to stop the East West Connector as currently planned.   The city council was trying to rush this decision through quietly.  But this is now receiving the attention it deserves.  Mercury News blasts funding diversion from Rail to Highway: https://www.mercurynews.com/ 2018/02/26/union-city-looks- to-divert-75-million-in- public-transit-funds-for-new- 320-million-road/ Bike East Bay declares Opposition to East West Connector Proposal: https://www.mercurynews.com/ wp-content/uploads/2018/02/ bike-east-bay-opposition-to- east-west-connector-proposal. pdf East Bay Times provides additional information on UC fiscal emergency: https://www.eastbaytimes.com/ 2018/02/22/union-city-council- to-weigh-fiscal-emergency- declaration/ The East West Connector has been on the books since the 60s and reflects the thinking of that era.  This $320M road is oversized.  This 90ft wide road will cross the Old Alameda Creek twice and will const...
Read more

Fremont's New Housing Legislation is another step in the right direction!

By -
Image
Fremont has now taken another step into the future, requiring that all new houses be delivered ready for the installation of electric-car charging stations.  According to the  East Bay Times , the city of Fremont has announced that any new housing project must include both solar panels and the electrical wiring required for the installation of a charging station Will this new legislation make the ownership of electric vehicles even more appealing to residents? Will Fremont turn into a zero-emission vehicle hub? http://www.greencarreports.com/news/1110317_solar-panels-ev-chargers-required-in-new-homes-in-fremont-ca Sunil Sethi  /  REALTOR,  Broker, MBA, CPA(inactive), GREEN Sunil Sethi Real Estate   38750 Paseo Padre Pkwy #B3, Fremont, CA 94536   www.sunilsethi.com BRE #01173766                              
Read more

Important Easement Information

By -
Image
  it's definitely worth being concerned about encroachments, especially in situations where someone is using a small portion of their neighbor's property without permission. Even if the neighbor is currently okay with it, there's no guarantee that they'll continue to be permissive in the future. It's definitely a problem that needs to be addressed prior to close of escrow. This is where property easements come into play, as they provide legal permission for someone to use a portion of another person's property for a specific purpose. It's important to understand the details of any easements that may be relevant to your situation, as they can impact your rights and obligations as a...
Read more