Mr Credit Radio | 1700AM | Noon to 1:00pm

Yes, in some cases the Bank can come after you for a 2nd Mortgage even if you’ve Foreclosed or done a Short-Sale on the property.  In the State of California, you are responsible for paying back your 2nd mortgage no matter what if it’s considered to be a “Recourse Loan”.  A Recourse Loan is when you got your 2nd mortgage after you purchased the home.  In other words, if you got your 2nd mortgage at the time you purchased your home, then it should be considered a Non-Recourse loan.  That would mean that if you foreclosed on the property or did a short-sale, the Bank wouldn’t be able to come after you for the balance owed on the 2nd mortgage.  However, if you got your 2nd mortgage after you purchased the home with a Refinance or Equity line of Credit, then it is considered to be a Recourse Loan in the State of California and the bank CAN come after you for the balance unpaid.  Now, I’m not a Real Estate Attorney, and I always recommend you consult a Professional when considering such important matters.  In this case, you should Contact Dan Kehr, with Kehr Law at 619.823.8230 for any questions regarding Real Estate Law.

If you want to side-step any Tax Liability, 2nd mortgage recourse liability, auto lease liability or eliminate all of your credit card debt strategically, then I recommend you call William McDonald with the McDonald Legal Group before you Foreclose or do a Short Sale on your property.  Timing is everything and the timing will be better sooner rather than later.

Hope it helps!

Derrick Evens
Mr Credit San Diego
858.571.0271
AskMrCredit@yahoo.com

A Short Sale is when you sell your home for less than what you owe on it.  This can be great if you need Relief from a large mortgage payment.  There are some tax and credit implications that are important to consider.  For example, if you owe $500,000 on your home and it’s only worth $300,000, if the Bank agrees to short-sale, then you will ultimately get a 1099 for Debt Relief income for $200,000.  This can be forgiven on your Federal Taxes, but don’t expect the financially destitute state of California to necessarily be so generous.  Of course, your credit score will take at least a slight hit for doing a short-sale, but you can really minimize the damage.  Avoiding a 90-day late payment on your mortgage(s) prior to the account being settled in the short-sale could allow you to recover your credit score completely within 6-12 months.  If you’re one of the lucky few who can get a short-sale completed without having to be late on your mortgage, then you’ll only see a small drop in your scores.  This is a far better alternative to Foreclosure, where you are not in control at all and it’s likely your credit score will get buried so far in the sand that it will take years to recover.

TIP: Don’t go 90 days late under any circumstances.  Avoid Foreclosure like the plague.

Derrick Evens
Mr Credit San Diego
858.571.0271
AskMrCredit@yahoo.com

 
No one is immune to the deceptive practices still floating around out in the Collection Agency world.  It’s such a simple way to rake in cash that it’s likely to never stop.  Of course, it’s important to handle this situations in a very business-like manner.  You don’t want to call and yell at anyone or threaten people.  When you call to check up on something like this, you need to make note of who you spoke to, their direct line or extension, the time, the date and actually write out in quotes exactly what they told you.  Make them wait while you do so.  Have them repeat if necessary.  Then, make sure you SAVE this information in a safe place.  Remember, the bureaus don’t verify anything, so if this had been reported to my credit report, I would have lost 100+ points without having done anything wrong. 

Come out to UTC Mall this Saturday to get some great info on San Diego Short Sales or building your credit in San Diego to buy a home in the future.  #1 ReMax Agent, Gary Kent and I will be providing refreshments, door prizes and priceless info for FREE to the public.  Affiliates such as lenders and Real Estate Agents can attend for $995/each.

January 30th at UTC Mall in Forum Hall (Over Wells Fargo)
10am to Noon – How to Short Sale Your San Diego Home or Rental    
1:00 to 3:00pm – How to Improve Your Credit & Buy a Home      

Be careful out there and stay informed.

Derrick Evens
Mr Credit San Diego
858.571.0271
AskMrCredit@yahoo.com