Those who walk away...what will eventually happen...
invite response
2010 Dec 29, 8:55am 23,632 views 115 comments
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bubblesitter
2011 Oct 5, 8:54am
A lot of people got burned on that risk and now they don't want to own up for it.
I heard,now lots of responsible people who bought after 2004 can't refinance their mortgages.
California recently passed SB458, which prevents deficiency judgments on junior liens in a short sale.
Whether it's retroactive or not remains to be seen.
My short sale was in '08. If I'm sued, SB458 will be one of my defenses. If I lose, my only true recourse is Chapter 13 BK. I will fight the whole way.
Why would it be retroactive? Do you see any language in the law that suggests it would be?
The practical effect of SB458 is that second mortgagees and third mortgagees will just stop agreeing to short sales unless they get what they want (more money). This is not really a good law.
fatguy, did you take a cash-out refi?
I heard,now lots of responsible people who bought after 2004 can't refinance their mortgages.
They weren't *that* responsible -- they paid bubble prices voluntarily and bid up prices with stupid loans. How many people do you know that were truly responsible who can't pay their mortgage now? I've never seen one mentioned in a media article, despite the fact that sometimes the media refers to them as "victims."
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There are many types of loans out there. Some are non-recourse (purchase money), but many are recourse loans even in the state of California (loans for second homes, second mortgages, re-financings, HELOCs, etc.).
http://washingtonindependent.com/88445/strategic-default-penalties-threaten-struggling-homeowners
and this one gives another threat-- Fannie Mae will "leave you on your own" for seven years if you walk away:
http://www.cnbc.com/id/37901895/Fannie_Mae_Walk_Away_and_You_Will_Pay
Any thoughts on whether the debts of these walkaways will catch up with them, even years down the road?
#housing