The answer to this question depends to a large part on whether you live in a state that has consumer protection statutes known as "anti - deficiency" statutes. These statutes are designed to protect the homeowner from being responsible for loans secured by their personal residence when the personal residence is "underwater." An "underwater" personal residence is one in which the principal balance on the loans that are against the property are in excess of the value of the property.
If you live in a state that has consumer protection statutes known as "anti - deficiency" statutes then you will be able to "walk away" from your home should you not be able or willing to continue making payments on it. Such statutes are enacted to prevent a homeowner from being sued by his lender should the homeowner be unwilling or unable to make his home loan payments.
In California, for example, the legislature enacted Code of Civil Procedure section 580b which prohibits a deficiency judgment in the strict sense, i.e., a personal judgment against the debtor. In relevant part the code section provides as follows:
A typical example of a legislature enactment is California's Code of Civil Procedure section 580b which provides as follows:
"No deficiency judgment shall lie . . . . under a deed of trust or mortgage given to the vendor to secure payment of the balance of the purchase price of that real property . . . . or under a deed of trust or mortgage on a dwelling for not more than four families given to a lender to secure repayment of a loan which was in fact used to pay all or part of the purchase price of that dwelling occupied, entirely or in part, by the purchaser."
You will also note that this section only applies to a "dwelling of not more than four families" which in essence means that if you live in and own and duplex, triplex or fourplex, this anti - deficiency statute applies to you.
It is important to note that in California, like most states that have such legislation, the anti - deficiency statutes apply to a "dwelling of not more than four families" which typically means a single family residence. Although in California it also applies to up to four unit buildings, so long as you live in one of the units.
While this type of statute has been adopted in many states not all states have such consumer protection statutes and you should check with an attorney in your state to find out whether or not it applies to you.
After making the determination, that you are in an anti - deficiency state, a strategic default is up to you.
If you are in an anti - deficiency state and that the anti - deficiency statutes apply to you, you will have the option to simply "walk away" from your home loan knowing that the lender will not pursue you further.
Author Mitchell Reed Sussman is a California real estate attorney specializing in real estate, foreclosure and bankruptcy.
If you live in a state that has consumer protection statutes known as "anti - deficiency" statutes then you will be able to "walk away" from your home should you not be able or willing to continue making payments on it. Such statutes are enacted to prevent a homeowner from being sued by his lender should the homeowner be unwilling or unable to make his home loan payments.
In California, for example, the legislature enacted Code of Civil Procedure section 580b which prohibits a deficiency judgment in the strict sense, i.e., a personal judgment against the debtor. In relevant part the code section provides as follows:
A typical example of a legislature enactment is California's Code of Civil Procedure section 580b which provides as follows:
"No deficiency judgment shall lie . . . . under a deed of trust or mortgage given to the vendor to secure payment of the balance of the purchase price of that real property . . . . or under a deed of trust or mortgage on a dwelling for not more than four families given to a lender to secure repayment of a loan which was in fact used to pay all or part of the purchase price of that dwelling occupied, entirely or in part, by the purchaser."
You will also note that this section only applies to a "dwelling of not more than four families" which in essence means that if you live in and own and duplex, triplex or fourplex, this anti - deficiency statute applies to you.
It is important to note that in California, like most states that have such legislation, the anti - deficiency statutes apply to a "dwelling of not more than four families" which typically means a single family residence. Although in California it also applies to up to four unit buildings, so long as you live in one of the units.
While this type of statute has been adopted in many states not all states have such consumer protection statutes and you should check with an attorney in your state to find out whether or not it applies to you.
After making the determination, that you are in an anti - deficiency state, a strategic default is up to you.
If you are in an anti - deficiency state and that the anti - deficiency statutes apply to you, you will have the option to simply "walk away" from your home loan knowing that the lender will not pursue you further.
Author Mitchell Reed Sussman is a California real estate attorney specializing in real estate, foreclosure and bankruptcy.
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Want to find out more about walking away from your mortgage, then visit attorney Mitchell Reed Sussman's site on how to "walk away" from your mortgage without being sued by your bank.
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