Can I be sued for a non-judicial foreclosure for the 2nd mortgage

[fclsd]

What is the name of your state (only U.S. law)? CA

My southern California property has been closed about 4 years ago, due to a divorce and job loss at the same time and it was severely under water. After the first few months, the letters from the debtor for the 2nd mortgage ceased. Now, they started to come again.

First mtg was about 325000 and the second was about 70000. House was sold by the bank for 255000 about 8 months after foreclosure. My down payment was not exactly 20% but was very close to that, at about 17-18%. So I was not one of those fly-by-night borrowers. Foreclosure was an unfortunate but unavoidable event.

First and second mortgages were held by different financial institutions.

Can the holder of 2nd mortgage sue me ? If they sell this paper to one of those unscrupulous collections agencies, can they legally come after me ? I know they can use scare tactics but do their case hold water ?

Thanks

 

[justalayman]

was the second mortgage purchase money?

 

[fclsd]

was the second mortgage purchase money?

Yes. At the time of purchase, I was not liquid enough and builder's lending/brokerage arm (same name, one says ABCD Homes the other says ABCD Mortgage) forced me to do 80/15/5 First-Mtg/Second-Mtg/Down-payment scheme. Then I paid a substantial sum into the first mortgage and bring the balance down to 325K levels, with the hopes of changing from interest only to a more conventional loan, by upping my equity in the property. But this coincided with the start of property value decline in southern cali. Few months later, my ex filed for divorce with a hefty alimony demand and lost my job right after that, just before this thing went to hell in a hand-basket.

 

[FlyingRon]

If the loan in question was part of the original purchase (rather than taken out afterwards), and we're talking about a single house (or anything not more than four units), they can not pursue you for a deficiency after foreclosure (judicial or not).

 

[fclsd]

If the loan in question was part of the original purchase (rather than taken out afterwards), and we're talking about a single house (or anything not more than four units), they can not pursue you for a deficiency after foreclosure (judicial or not).

Thank you for your answer. Yes it is just a single family home, which was very overpriced for the area I purchased it, knowing well it was going to go down in value, but I though with an income like mine, I could weather the storm. I did not anticipate all the crap which got dumped on me, in the process. Live and learn I suppose.

But knowing that the collection agency vultures coming out of woodwork, not having a leg to stand on, is a relief. Thanks again.