Non-recourse second mortgage after foreclosure, credit
Posted: Tue Oct 02, 2012 3:01 pm
As I read 580d there's nothing that says this has to be a primary residence
for the antideficiency law to protect the debtor, correct?
Holly Roark
holly@roarklawoffices.com
www.roarklawoffices.com
Central District of California
Consumer Bankruptcy Attorney
1875 Century Park East, Suite 600
Los Angeles, CA 90067
T (310) 553-2600
F (310) 553-2601
On Fri, Sep 28, 2012 at 4:41 PM, Patrick T. Green wrote:
> **
>
>
> Ive been called worse.
****>
> ** **
>
> If you have any questions or concerns, please contact me.****
>
> ** **
>
> Pat****
>
> ** **
>
> Patrick T. Green****
>
> Attorney at Law****
>
> Fitzgerald & Green****
>
> 1010 E. Union St. Ste. 206****
>
> Pasadena, CA 91106****
>
> Tel: 626-449-8433****
>
> Fax: 626-449-0565****
>
> pat@fitzgreenlaw.com****
>
> ** **
>
> *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] *On Behalf
> Of *Stephen Vokshori
> *Sent:* Friday, September 28, 2012 11:07 AM
>
> *To:* cdcbaa@yahoogroups.com
> *Subject:* RE: [cdcbaa] Non-recourse second mortgage after foreclosure,
> credit report question****
>
> ** **
>
> ****
>
> Oops, meant to write Pat. My apology. ****
>
> ****
>
> *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] *On Behalf
> Of *Stephen Vokshori
> *Sent:* Friday, September 28, 2012 9:38 AM
> *To:* cdcbaa@yahoogroups.com
> *Subject:* RE: [cdcbaa] Non-recourse second mortgage after foreclosure,
> credit report question****
>
> ****
>
> ****
>
> Thanks for the advice, Dennis. Have attended the NACA conferences already
> but I should probably get my hands on the NCLC manual.****
>
> ****
>
> *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] *On Behalf
> Of *pat@fitzgreenlaw.com
> *Sent:* Thursday, September 27, 2012 3:47 PM
> *To:* cdcbaa@yahoogroups.com
> *Subject:* Re: [cdcbaa] Non-recourse second mortgage after foreclosure,
> credit report question****
>
> ****
>
> ****
>
> Stephen:
> FCRA and FDCPA practice is quite complicated. If you want to take plunge I
> strongly recommend that you purchase the NCLC manual for each and consider
> attending the annual conferences for each that are put on by NACA and/or
> NCLC.
> Pat Green****
>
> Sent from my Verizon Wireless BlackBerry****
> ------------------------------
>
>
> *Sender: *cdcbaa@yahoogroups.com ****
>
> *Date: *Thu, 27 Sep 2012 15:02:09 -0700****
>
> *To: *****
>
> *ReplyTo: *cdcbaa@yahoogroups.com ****
>
> *Cc: *****
>
> *Subject: *RE: [cdcbaa] Non-recourse second mortgage after foreclosure,
> credit report question****
>
> ****
>
> ****
>
> Thanks for the tips, Nick and Jay. Never brought an FCRA or FDCPA claim
> before, I guess Ill need to do some further research. If anyone has any
> case law, case numbers, pleadings or other resources on the topic, please
> email me.****
>
> ****
>
> Thanks,****
>
> Stephen ****
>
> ****
>
> *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] *On Behalf
> Of *Nicholas Gebelt
> *Sent:* Thursday, September 27, 2012 1:12 PM
> *To:* cdcbaa@yahoogroups.com
> *Cc:* ngebelt@goodbye2debt.com
> *Subject:* RE: [cdcbaa] Non-recourse second mortgage after foreclosure,
> credit report question****
>
> ****
>
> ****
>
> Dear Pat, Jeff, and Stephen,****
>
> ****
>
> I stand corrected. My focus was exclusively on 580d, which makes no
> distinction between purchase money and nonpurchase money debt. Stephen> reference to *Brown v. Jenson*, (1953) 41 Cal. 2d 193 is directly on
> point with regard to the application of 580b to purchase money debt. My
> experience with this subject in the past was solely in the refi context, so
> I had a gap in my knowledge. All of this goes to show the benefit of the
> listserve: I learn new things.****
>
> ****
>
> Finally, Stephen, why not seek relief for your friend under Bus. &Prof.
> Code 17200 and 17500? Since the (former) creditor is misrepresenting
> the status of the debt, perhaps you can characterize this behavior as an
> unfair business practice since it violates the FDCPA which states:****
>
> ****
>
> A debt collector may not use any false, deceptive, or misleading
> representation or means in connection with the collection of any debt.
> Without limiting the general application of the foregoing, the following
> conduct is a violation of this section: . . . (2) *The false
> representation of - (A) the character, amount, or legal status of any debt
> * . . .****
>
> ****
>
> 15 U.S.C. 1692e(2)(A)(emphasis added).****
>
> ****
>
> Costs and attorney fees are available under the private attorney general
> statute, Cal. Civ. Proc. Code 1021.5.****
>
> ****
>
> Good luck,****
>
> ****
>
> Nick****
>
> ****
>
> Nicholas Gebelt, Ph.D., J.D.****
>
> Board Certified Bankruptcy Specialist****
>
> ****
>
> [image: Description: Description:
> cid:image003.jpg@01CC076B.B14D73C0]****
>
> ****
>
> Law Offices of Nicholas Gebelt****
>
> 15150 Hornell Street****
>
> Whittier, CA 90604****
>
> Phone: 562.777.9159****
>
> FAX: 562.946.1365****
>
> Email: ngebelt@goodbye2debt.com; ngebelt@gebeltlaw.com****
>
> Web: www.goodbye2debt.com****
>
> Blog: www.southerncaliforniabankruptcylawblog.com/****
>
> ****
>
> *We are a debt relief agency. We help people file for bankruptcy relief
> under the Bankruptcy Code.*****
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> ****
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> ***
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> ****
>
> *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] *On Behalf
> Of *Patrick T. Green
> *Sent:* Thursday, September 27, 2012 12:54 PM
> *To:* cdcbaa@yahoogroups.com
> *Cc:* ngebelt@goodbye2debt.com
> *Subject:* RE: [cdcbaa] Non-recourse second mortgage after foreclosure,
> credit report question****
>
> ****
>
> ****
>
> Nick:****
>
> ****
>
> My reading of the case excerpts you provided only indicate under 580d that
> a sold out junior is not prohibited from pursuing a deficiency. However,
> 580b prohibits a purchase money lender from pursuing a deficiency. If the
> sold out junior is purchase money, as is the case of the typical 80/20 loan
> where the purchase is 100% financed, but there are two loans, the 580b
> blocks a deficiency jmt. The prohibition of 580b stands alone and is not
> trumped by the cases you cite which do not address the issue. The
> prohibition originates with loan and mortgage and continues to exist
> whether there is a default or not.****
>
> ****
>
> The CEB Treatise CA Mortgages, Deeds of Trust, and Foreclosure
> Litigation puts it his way: CCP 580b operates within a different frame of
> reference than do CCP 580a, 580d and 726, which relate to the process of
> collection after default and do not apply to predefault events. 580b is
> independent of the postdefault collection process. Its application depends
> on the original nature of the secured transaction, i.e., whether the loan
> was initially made for the purpose of purchasing real property security
> (citations omitted).****
>
> ****
>
> If you have any questions or concerns, please contact me.****
>
> ****
>
> Pat****
>
> ****
>
> Patrick T. Green****
>
> Attorney at Law****
>
> Fitzgerald & Green****
>
> 1010 E. Union St. Ste. 206****
>
> Pasadena, CA 91106****
>
> Tel: 626-449-8433****
>
> Fax: 626-449-0565****
>
> pat@fitzgreenlaw.com****
>
> ****
>
> *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] *On Behalf
> Of *Nicholas Gebelt
> *Sent:* Wednesday, September 26, 2012 11:31 PM
> *To:* cdcbaa@yahoogroups.com
> *Cc:* ngebelt@goodbye2debt.com
> *Subject:* RE: [cdcbaa] Non-recourse second mortgage after foreclosure,
> credit report question****
>
> ****
>
> ****
>
> Dear Jeff,****
>
> ****
>
> The case law does not distinguish between purchase money and nonpurchase
> money mortgages in addressing this particular question. The quote I
> provided was from the second paragraph of the *Cadelrock* opinion. That
> paragraph was given by the court as a general reading of 580d before it
> focused on the peculiar facts of the case at hand. That paragraph did not
> differentiate between purchase money and nonpurchase money mortgages. ***
> *
>
> ****
>
> Moreover, the *Cadelrock* quote cited to two other cases which echo this
> general principle without distinguishing between purchase money and
> nonpurchase money mortgages. The first case cited, *Roseleaf Corp. v.
> Chierighino*, 378 P. 2d 97 (Cal. 1963), is the seminal case, the well
> from which all the subsequent case law on the subject appears to draw. The
> second case cited, *Bank of America v. Graves*, 51 Cal. App. 4th 607
> (Cal.Ct. App., 4th App. Dist., 2nd Div. 1996), provides a nice prcis of
> Justice Traynors *Roseleaf* holding, along with a particularly relevant
> quote from a treatise discussing the subject (with emphasis added):****
>
> ****
>
> In the leading case of *Roseleaf Corp. v. Chierighino*, *supra*, 59
> Cal.2d 35, Chief Justice Traynor held, *The `one form of action rule of
> section 726 does not apply to a sold-out junior lienor [citations], nor
> does the three-months limitation of section 580a*. [Citations.] There is
> no reason to compel a junior lienor to go through foreclosure and sale when
> there is nothing left to sell.... [] The fair-value limitations of
> sections 580a and 726 likewise do not apply to a junior lienor, ... whose
> security has been rendered valueless by a senior sale.... [] The purpose
> of the fair-value limitations in sections 580a and 726 does not extend to
> sold-out junior lienors. (*Id*. at pp. 38-40.) Justice Traynor further
> explained: The position of a junior lienor whose security is lost through
> a senior sale is different from that of a selling senior lienor. A selling
> senior can make certain that the security brings an amount equal to his
> claim against the debtor or the fair market value, whichever is less,
> simply by bidding in for that amount. He need not invest any additional
> funds. The junior lienor, however, is in no better position to protect
> himself than is the debtor. Either would have to invest additional funds
> to redeem or buy in at the sale. Equitable considerations favor placing
> this burden on the debtor, not only because it is his default that provokes
> the senior sale, but also because he has the benefit of his bargain with
> the junior lienor who, unlike the selling senior, might otherwise end up
> with nothing. (*Roseleaf Corp. v. Chierighino*, *supra*, 59 Cal.2d at p.
> 41.)****
>
> ****
>
> The leading texts on real property set forth the same principles. *The
> prohibition against a deficiency judgment does not apply to the beneficiary
> of a junior deed of trust whose security has been rendered valueless by a
> foreclosure sale of the property under a senior encumbrance. After the
> security has been lost by the foreclosure sale of the senior lien, the
> junior lienor can sue the debtor directly on the promissory note, which is
> then considered unsecured*. (4 Miller & Starr, Cal. Real Estate (2d ed.
> 1989) 9:156, p. 531; see also 3 Witkin, Summary of Cal. Law (9th ed.
> 1987) Security Transactions in Real Property, 159, pp. 658-659.)****
>
> ****
>
> I hope this helps.****
>
> ****
>
> Nick****
>
> ****
>
> Nicholas Gebelt, Ph.D., J.D.****
>
> Board Certified Bankruptcy Specialist****
>
> ****
>
> [image: Description: Description: Description:
> cid:image003.jpg@01CC076B.B14D73C0]****
>
> ****
>
> Law Offices of Nicholas Gebelt****
>
> 15150 Hornell Street****
>
> Whittier, CA 90604****
>
> Phone: 562.777.9159****
>
> FAX: 562.946.1365****
>
> Email: ngebelt@goodbye2debt.com; ngebelt@gebeltlaw.com****
>
> Web: www.goodbye2debt.com****
>
> Blog: www.southerncaliforniabankruptcylawblog.com/****
>
> ****
>
> *We are a debt relief agency. We help people file for bankruptcy relief
> under the Bankruptcy Code.*****
>
> ****
>
> *Confidentiality Note*: This e-mail is intended only for the person or
> entity to which it is addressed and may contain information that is
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> Dissemination, distribution, or copying of this e-mail or the information
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> responsible for delivering the message to the intended recipient, is
> prohibited. If you have received this e-mail in error, please notify us
> immediately at 562.777.9159 or e-mail info@gebeltlaw.com and destroy the
> original message and all copies.****
>
> ****
>
> *Representation Note*: If you have not signed a contract of
> representation, the Law Offices of Nicholas Gebelt do not represent you,
> and this email does not contain any legal advice for you.****
>
> ****
>
> *IRS Circular 230 Disclosure: *In order to comply with the requirements
> imposed by the Internal Revenue Service, we inform you that any U.S. tax
> advice contained in this communication (including any attachments) is not
> intended to be used, and cannot be used, for the purpose of (i) avoiding
> penalties under the Internal Revenue code, or (ii) promoting, marketing, or
> recommending to another party any transaction or matter addressed herein.*
> ***
>
> ****
>
> *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] *On Behalf
> Of *Jeffrey S. Shinbrot
> *Sent:* Wednesday, September 26, 2012 10:48 PM
> *To:* cdcbaa@yahoogroups.com
> *Cc:* cdcbaa@yahoogroups.com; ngebelt@goodbye2debt.com
> *Subject:* Re: [cdcbaa] Non-recourse second mortgage after foreclosure,
> credit report question****
>
> ****
>
> ****
>
> Bill Lobel's house was a refinance, therefore not purchase money, right?
> If it was purchase money, the second would be uncollectable -- or is it too
> late in the evening for me to be having this discussion?
>
> Sent from my iPad****
>
>
> On Sep 26, 2012, at 10:38 PM, "Nicholas Gebelt"
> wrote:****
>
> Dear Jeff,****
>
> ****
>
> From my last post (
> http://scholar.google.com/scholar_case? ... &as_sdt4,5
> ):****
>
> *Thus, when two separate loans are secured (via separate deeds of trust)
> by the same real property, section 580d does not prevent a junior creditor
> from obtaining a money judgment for the full amount due on the underlying
> junior debt obligation when the senior lienholder conducts a nonjudicial
> foreclosure that extinguishes the junior lienholders security interest.*(
> *Roseleaf Corp. v. Chierighino* (1963) 59 Cal.2d 35, 43-44 [27 Cal.Rptr.
> 873, 378 P.2d 97] (*Roseleaf*); *Bank of America v. Graves* (1996) 51
> Cal.App.4th 607, 611-616 [59 Cal.Rptr.2d 288] (*Graves*).)****
>
> *Cadlerock Joint Venture, LP v. Lobel*, 206 Cal.App.4th 1531, 1536
> (Cal.Ct.App., 4th App. Dist., 3rd Div. 2012).****
>
> Nick****
>
> ****
>
> Nicholas Gebelt, Ph.D., J.D.****
>
> Board Certified Bankruptcy Specialist****
>
> ****
>
> ****
>
> ****
>
> Law Offices of Nicholas Gebelt****
>
> 15150 Hornell Street****
>
> Whittier, CA 90604****
>
> Phone: 562.777.9159****
>
> FAX: 562.946.1365****
>
> Email: ngebelt@goodbye2debt.com; ngebelt@gebeltlaw.com****
>
> Web: www.goodbye2debt.com****
>
> Blog: www.southerncaliforniabankruptcylawblog.com/****
>
> ****
>
> *We are a debt relief agency. We help people file for bankruptcy relief
> under the Bankruptcy Code.*****
>
> ****
>
> *Confidentiality Note*: This e-mail is intended only for the person or
> entity to which it is addressed and may contain information that is
> privileged, confidential, or otherwise protected from disclosure.
> Dissemination, distribution, or copying of this e-mail or the information
> herein by anyone other than the intended recipient, or an employee or agent
> responsible for delivering the message to the intended recipient, is
> prohibited. If you have received this e-mail in error, please notify us
> immediately at 562.777.9159 or e-mail info@gebeltlaw.com and destroy the
> original message and all copies.****
>
> ****
>
> *Representation Note*: If you have not signed a contract of
> representation, the Law Offices of Nicholas Gebelt do not represent you,
> and this email does not contain any legal advice for you.****
>
> ****
>
> *IRS Circular 230 Disclosure: *In order to comply with the requirements
> imposed by the Internal Revenue Service, we inform you that any U.S. tax
> advice contained in this communication (including any attachments) is not
> intended to be used, and cannot be used, for the purpose of (i) avoiding
> penalties under the Internal Revenue code, or (ii) promoting, marketing, or
> recommending to another party any transaction or matter addressed herein.*
> ***
>
> ****
>
> *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] *On Behalf
> Of *Jeffrey S. Shinbrot
> *Sent:* Wednesday, September 26, 2012 10:30 PM
> *To:* cdcbaa@yahoogroups.com
> *Cc:* cdcbaa@yahoogroups.com; ngebelt@goodbye2debt.com
> *Subject:* Re: [cdcbaa] Non-recourse second mortgage after foreclosure,
> credit report question****
>
> ****
>
> ****
>
> Nick, isn't purchase money, purchase money so lender is out of luck?
>
> Sent from my iPad****
>
>
> On Sep 26, 2012, at 3:24 PM, "Nicholas Gebelt"
> wrote:****
>
> Dear Stephen,****
>
> ****
>
> It is true that Cal. Civ. Proc. Code 580(b) and (d) contain foreclosure
> anti-deficiency language. However, that language only limits the
> foreclosing entity. If the second was held by a different entity from the
> first, that entity didnt get its bite at the apple. Therefore, the second
> mortgage debt could still be valid. Were both mortgages held by the same
> lender?****
>
> ****
>
> Nick****
>
> ****
>
> Nicholas Gebelt, Ph.D., J.D.****
>
> Board Certified Bankruptcy Specialist****
>
> ****
>
> ****
>
> ****
>
> Law Offices of Nicholas Gebelt****
>
> 15150 Hornell Street****
>
> Whittier, CA 90604****
>
> Phone: 562.777.9159****
>
> FAX: 562.946.1365****
>
> Email: ngebelt@goodbye2debt.com; ngebelt@gebeltlaw.com****
>
> Web: www.goodbye2debt.com****
>
> Blog: www.southerncaliforniabankruptcylawblog.com/****
>
> ****
>
> *We are a debt relief agency. We help people file for bankruptcy relief
> under the Bankruptcy Code.*****
>
> ****
>
> *Confidentiality Note*: This e-mail is intended only for the person or
> entity to which it is addressed and may contain information that is
> privileged, confidential, or otherwise protected from disclosure.
> Dissemination, distribution, or copying of this e-mail or the information
> herein by anyone other than the intended recipient, or an employee or agent
> responsible for delivering the message to the intended recipient, is
> prohibited. If you have received this e-mail in error, please notify us
> immediately at 562.777.9159 or e-mail info@gebeltlaw.com and destroy the
> original message and all copies.****
>
> ****
>
> *Representation Note*: If you have not signed a contract of
> representation, the Law Offices of Nicholas Gebelt do not represent you,
> and this email does not contain any legal advice for you.****
>
> ****
>
> *IRS Circular 230 Disclosure: *In order to comply with the requirements
> imposed by the Internal Revenue Service, we inform you that any U.S. tax
> advice contained in this communication (including any attachments) is not
> intended to be used, and cannot be used, for the purpose of (i) avoiding
> penalties under the Internal Revenue code, or (ii) promoting, marketing, or
> recommending to another party any transaction or matter addressed herein.*
> ***
>
> ****
>
> *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] *On Behalf
> Of *Stephen Vokshori
> *Sent:* Wednesday, September 26, 2012 3:07 PM
> *To:* cdcbaa@yahoogroups.com
> *Subject:* [cdcbaa] Non-recourse second mortgage after foreclosure,
> credit report question****
>
> ****
>
> ****
>
> A family friend lost his primary home to foreclosure in 2010. There was a 1
> st and 2nd both purchase money loans. The 2nd still shows up on his
> credit report as being open and with a balance due.****
>
> ****
>
> Im familiar with CCP 580 (b) and (d), just want to confirm that from a
> credit reporting perspective the lender should not be reporting this as an
> open account with a balance due. Assuming this is reported incorrectly,
> whats the best course of action? His credit score has dropped an
> additional 100 points since the foreclosure due to this open account.****
>
> ****
>
> Thanks,****
>
> Stephen****
>
> ****
>
> Stephen Vokshori****
>
> Vokshori Law Group ****
>
> 1010 Wilshire Blvd. Ste. 1404****
>
> Los Angeles, CA 90017****
>
> ****
>
> main: (213) 986-4323****
>
> fax: (310) 881-6996****
>
> email: stephen@voklaw.com****
>
> web: www.VokLaw.com ****
>
> ****
>
> ****
>
>
>
As I read 580d there's nothing that says this has to be a primary residence for the antideficiency law to protect the debtor, correct? Holly Roark
holly@roarklawoffices.com
www.roarklawoffices.com
Central District of California
Consumer Bankruptcy Attorney
1875 Century Park East, Suite 600
Los Angeles, CA 90067
T (310) 553-2600
F (310) 553-2601
On Fri, Sep 28, 2012 at 4:41 PM, Patrick T. Green <pat@fitzgreenlaw.com> wrote:
Ive been called worse.
If you have any questions or concerns, please contact me.
PatPatrick T. Green
Attorney at Law
1010 E. Union St. Ste. 206Pasadena, CA 91106
Tel: 626-449-8433Fax: 626-449-0565
pat@fitzgreenlaw.com
From: cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com] On Behalf Of Stephen Vokshori
Sent: Friday, September 28, 2012 11:07 AMTo: cdcbaa@yahoogroups.comSubject: RE: [cdcbaa] Non-recourse second mortgage after foreclosure, credit report question
Oops, meant to write Pat. My apology.
,223);border-top-width:1pt;border-top-style:solid">From: cdcbaa@yahoogroups.com [mailto:From: cdcbaa@yahoogroups.com [mailto:Thanks,
Stephen
The post was migrated from Yahoo.