what happens if i went through foreclosure and the house was auctioned of for 100,000 deficiency in CA?

Author: admin  //  Category: franklin mortgage

The first mortgage Chase sold the property in an auction and got their money but the second mortgage Franklin managment was not and now they reported it on my credit report and wont come out for 7 years. Am i liable to pay the deficiency or does California protect me under the anti deficiency laws?
All loans were to pay off the house, they were purchase money loans.

Chances are they will write off the deficiency balance and send you a 1099 for that amount.. It’s considered unearned income.

3 Responses to “what happens if i went through foreclosure and the house was auctioned of for 100,000 deficiency in CA?”

  1. Paul in San Diego Says:

    A first mortgage in the US is almost always a non-recourse loan, meaning that the lender can only seize the property and sell it to recoup their losses. You are then not responsible for the difference, although you might get 10-99′d for the difference and pay income taxes on it, as though the bank literally gave you that money in cash. However, you still owe the money on the second and they can go after you to get it, including selling the debt to a collector, getting a judgment to garnish your wages, etc. In that case, you’re probably better off declaring bankruptcy, which eliminates all of those debts. And, even though your credit will be completely shot (moreso than if you just got foreclosed on), this also disappears from your credit report in 7 years.
    References :

  2. realtor.sailor Says:

    Chances are they will write off the deficiency balance and send you a 1099 for that amount.. It’s considered unearned income.
    References :
    I’m a Realtor

  3. Ryan M Says:

    You will owe CA income taxes on the $100k. You aren’t protected from the tax bill, only from a civil suit from Chase.
    References :

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