What are legal issues if I purchase a new home and walk away from current one?

UPDATED: Jan 4, 2012

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What are legal issues if I purchase a new home and walk away from current one?

Asked on January 4, 2012 under Real Estate Law, California


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If you end up purchasing a new home and let the one that you presently own fall into foreclosure, there is a possibility that you could be responsible for a deficiency judgment if the existing home sells for less than what is owed on the loan and the state that you live in does not have anti-deficiency legislation with respect to purchase money loans (original loan for the home's purchase).

The key to getting an answer to your question is first to determine whether or not your loan for the home that you are living in is purchase money and if so, does your state have anti-deficiency legislation?

In order to get the answers you need, I suggest that you consult with a real estate attorney in your locality about your situation.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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