Bad faith waste of a foreclosure property

Many people working in Real Estate in San Diego have seen nice homes in nice subdivisions trashed by homeowners who were subject to foreclosure actions. California homeowners should be aware that bad faith abuse and possibly even omissions to act could take the homeowner out of the protection anti-deficiency provision of California law.

Any deliberate impairment of the security (real estate for our purposes) and sometimes omissions causing impairment to the security could subject homeowners to deficiency proceedings.

pre-foreclosure - non-recourse loan?

Does the second have right to go after the borrower. It seem that there is a basic rule and a caveat

The basic rule is that 580b protection would apply in standard transactions with sold out juniors.

However the 9th circuit has made a ruling which seems to leave this area of the law somewhat open to good arguments. In the Prestige case the court distinguished cases in which the security was exhausted by a senior sale without giving us much further guidance.

I am just thinking this through but we seemed to be left with the the strange conclusion that an upside down homeowner worried about deficiency may be "incentivised" to make sure the second is "sold out".

Also note this information does not necessarily apply to non standard transactions or construction loans. And seriously please have your situation reviewed by a California attorney. The above information is a quick overview at best. If you were my client I would do a great deal more research before giving any "advice".

SignOnSanDiego.com > News > Metro -- Foreclosure agents bask in bad times

"SignOnSanDiego.com > News > Metro -- Foreclosure agents bask in bad times: "Today, of the nearly 24,000 listings of resale houses, condominiums and mobile homes, roughly one-fifth were identified by Sandicor, a local multiple listing service, as distressed properties either in foreclosure or approaching the stage where owners could lose their homes.

Agents who specialize in the properties, known as real-estate-owned homes, or REOs, say they're having a field day. While it may be a bit morbid there is a certain side of the real estate industry which does well in bad times."

If one fifth of the properties are distressed one would have to wonder what is keeping the prices up. Over the weekend I noticed some home in Carlsbad which were REO listings. And these listings were priced significantly below the market. Homes were for sale for 700 thousand or less which buildes were attempting to sell for over 800,000 in January.

UCLA economists say state will avoid recession North County Times - North San Diego and Southwest Riverside County News

A UCLA economist says California will avoid recession. That would be good news. If we did not know this joke that a CNBC economist Bill Wolman once told. The secret to being a good economist is forecast early and forecast often.

the point of story is that overseas sales do to the weak dollar will compensate or the housing weakness.

"In contrast to past recessions, when waves of foreclosures were triggered by job losses, most recent foreclosures have been the result of families having overextended themselves. Many stretched to buy houses they could barely afford and chose to take out loans with rates that adjust upward after two or three years. The biggest wave of those rising house payments is due to take place in early 2008, the report shows.

It could be the middle of 2009 before the market turns the corner, according to the report."

It may not be time for San Diego's budding "short sale specialists" to pack it in just yet.


UCLA economists say state will avoid recession North County Times - North San Diego and Southwest Riverside County News