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Claim for repayment of mortgage insurance
Margaret:
I don't believe "sold-out junior" status is relevant to 580b. I've read the
Roseleaf v. Chierghino case, which addressed whether the subject loan was in
fact "purchase money" and entitled to the anti-deficiency protections of
580b. As set forth in the CEB's Mortgage and Deed of Trust Practice guide:
"Code of Civil Procedure Section 580b operates within a different frame of
reference than do CCP Section 580a, 580d and 726. With the possible
exception of the security-first aspect of Section 726(a), those other rules
relate to the process of collection after default and do not apply to
predefault events. Section 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 the real property security. Subsequent events
generally do not alter the effect of Section 580b."
Jim
James R. Selth
Weintraub & Selth, APC
12121 Wilshire Boulevard, Suite 1300
Los Angeles, California 90025
Telephone: (310) 207-1494
Facsimile: (310) 442-0660
E-Mail: jim@wsrlaw.net
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The post was migrated from Yahoo.
The 2nd trust deed holder is a "sold out jr. lienor" after the 1st TD
forecloses. That is an exception to the one action rule. Yes they can
go after your client, and if that loan is insured--so can the insurer.
It is an exception to 580 b.--see Roseleaf v. Chierighino
59 Cal. 2d 35 (Cal. 1963) which is still good law.
During the last recession the problem was common because there were so
many 2nd TDs. They are a non-secured debt once the property has been
foreclosed upon. I included them as such on the Bk, listing both the
insurer and the 2nd TD holder.
Margaret Norman
111 N Sepulveda Blvd. #355
Manhattan Beach, Ca. 90266
310-376-7873
On Fri, 16 Jan 2009 09:22:47 -0800
"Jim Selth" wrote:
> A client has contacted me with an issue I have never faced before,
>but which
> I expect could become common for many of us in the future.
>
> The client bought owner occupied property in 2007 with classic 100%
> financing: an 80% First Trust Deed and a 20% Second Trust Deed (from
>the
> same lender). He never refinanced either loan, thus he would have
>full
> protection from a suit for a deficiency balance on either loan under
>CCP
> 580b. The First Trust Deed is now in foreclosure. The client has
>received
> a demand letter from the issuer of the mortgage insurance on the
>Second
> Trust Deed (AIG) making demand for payment of the full $85,000
>balance of
> the Second Trust Deed.
>
> I am about to start the research of whether the protections of 580b
>apply to
> an issuer of mortgage insurance, or whether the insurance contract
>with the
> borrower stands apart from the liability the borrower has to the
>lender.
> Has anyone else faced this issue before? Any thoughts?
>
> Jim
>
>
> James R. Selth
>
> Weintraub & Selth, APC
>
> 12121 Wilshire Boulevard, Suite 1300
>
> Los Angeles, California 90025
>
> Telephone: (310) 207-1494
>
>Facsimile: (310) 442-0660
>
> E-Mail: jim@wsrlaw.net
>
Margaret Norman, Attorney
111 N. Sepulveda Blvd. #355
Manhattan Beach, Ca. 90266
310-376-7873
Fax-310-798-9846
WWW:Margeslaw.com
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The post was migrated from Yahoo.
A client has contacted me with an issue I have never faced before, but which
I expect could become common for many of us in the future.
The client bought owner occupied property in 2007 with classic 100%
financing: an 80% First Trust Deed and a 20% Second Trust Deed (from the
same lender). He never refinanced either loan, thus he would have full
protection from a suit for a deficiency balance on either loan under CCP
580b. The First Trust Deed is now in foreclosure. The client has received
a demand letter from the issuer of the mortgage insurance on the Second
Trust Deed (AIG) making demand for payment of the full $85,000 balance of
the Second Trust Deed.
I am about to start the research of whether the protections of 580b apply to
an issuer of mortgage insurance, or whether the insurance contract with the
borrower stands apart from the liability the borrower has to the lender.
Has anyone else faced this issue before? Any thoughts?
Jim
James R. Selth
Weintraub & Selth, APC
12121 Wilshire Boulevard, Suite 1300
Los Angeles, California 90025
Telephone: (310) 207-1494
Facsimile: (310) 442-0660
E-Mail: jim@wsrlaw.net
A client has contacted me with an issue I have never
faced before, but which I expect could become common for many of us in the
future.
The client bought owner occupied property in
2007 with classic 100% financing: an 80% First Trust Deed and a 20% Second
Trust Deed (from the same lender). He never refinanced either loan, thus
he would have full protection from a suit for a deficiency balance on either
loan under CCP 580b. The First Trust Deed is now in foreclosure. The
client has received a demand letter from the issuer of the mortgage insurance on
the Second Trust Deed (AIG) making demand for payment of the full $85,000
balance of the Second Trust Deed.
I am about to start the research of whether theprotections of 580b apply to an issuer of mortgage insurance, or whether the
insurance contract with the borrower stands apart from the liability the
borrower has to the lender. Has anyone else faced this issue before?
Any thoughts?
Jim
James
R. Selth
Weintraub
& Selth, APC
12121
Wilshire Boulevard, Suite 1300
Los
Angeles,
California
The post was migrated from Yahoo.