| ChuckB
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In United States
Registered Jan 27, 2012
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ChuckB's most recent comments:
- On 1 Oct 2012
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The middle class is leaving California,
ChuckB said:
I left CA last year for NW Arizona. State income tax is 3.5% compared to over 9 in CA. My gas costs are 70 to 90 cents less PER GALLON than across the river in CA. Housing costs are comparable or even less than the Inland Empire in So CA. Property tax seems comparable to what I paid in CA. I don't see the state or municipalities in as much financial trouble as those in CA or NV. Las Vegas is a quick drive and Laughlin is even closer! I do miss CA, but I figure it is an irrational emotional problem that I will eventually get over. BTW, my state taxes in CA last year were about $30,000. - On 26 Sep 2012
in
Are ALL refinanced loans automatically changed to RECOURSE loans?,
ChuckB said:
My assumptions are that the house was refinanced in 2004 with a first and a HELOC. You say 99% of the value of the HELOC was not used to remodel or improve the house.
If there is a trustee sale on the first, the one action rule says that the lender cannot come back for a second bite of the apple and get a deficiency judgement. However, some debt buyers may still try to haul him into court even if they have no standing better than the original note holder.
If he has a HELOC and he has used it, the holder has an unsecured note and can proceed against your friend just as if it were unsecured credit card debt.
If the holder forgives the debt (ha ha) your friend should get a 1099 from the lender that says so. This will be considered income by the IRS. To the extent that the forgiven debt was used to improve or preserve the house, the IRS would not tax it. But, I think your friend has to be sure his foreclosure is completed before the end of 2012. - On 29 Jun 2012
in
Are ALL refinanced loans automatically changed to RECOURSE loans?,
ChuckB said:
E-man is correct as far as he went: "recourse or non-recourse doesn't really matter. You're protected by the one action rule so what's the beef?"
In CA, if the senior loan forecloses, judicial or not, the junior loans have not yet had their "one action." They basically become unsecured loans (like credit cards) because the collateral has been stripped away and sold to satisfy the senior debt. These junior loans frequently get packaged up in bad debt portfolios, bought by investors for 5 cents on the dollar. A couple years later they will come after you for the full debt plus fees and interest, but will usually settle for the amounts of any of your unused credit lines they find when they run your credit report.
However, being unsecured loans makes it easier to discharge them in a bankruptcy so don't forget to mention them to your BK attorney, in the event you are still within the statute of limitations to collect.
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