Will my dad lose his house if defaults on the loan and/or line of credit on his other home?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Will my dad lose his house if defaults on the loan and/or line of credit on his other home?
My dad owes $137,000 on a house he bought over 35 years ago in CA, and owes $200,000 on an interest only home equity loan. The home equity loan was used to purchase a new house in AZ about 5 years ago. The 2 homes are worth less than the loans. My dad is talking about “walking away” from the CA home because he can no longer afford the payments on his limited income. What are my dad’s options? Will he lose his AZ house if defaults on the loans? Is there further information needed to make a determination? Can you refer us to a lawyer if we need more information?
Asked on January 2, 2012 under Real Estate Law, California
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
I suggest that the best way for your father to resolve the situation he has with the California home is to try and sell it as a "short sale" if he owes more on the loans than the home is worth.
In California, there is legislation passed in July 2011 where if a lender accepts any portion on a sale of real property in a short sale situation, the lender cannot sue the owner of the property for any deficiency even if the loan is not purchase money.
I suggest that your father consult with an expereinced real estate attorney concerning the situation he is in and the best way to try and resolve the problem.
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.