Legal Question in Credit and Debt Law in California
I applied with my bank for doing a short sale on my house, which is currently rented out. I have stopped paying the mortgage for the first time this month. I know this will affect my credit rating, but the main question I have is if the bank has rights to go after:
(1) my 401K
(2) the house I own with my wife (her name is on that mortgage, but both our names are on the title)
(3) other property like cars
Basically: how risky (besides the credit rating) is it to stop paying?
1 Answer from Attorneys
The bank can't go after any of those unless they somehow sue you and get a judgment and then a writ to go after those items. The only thing the first mortgage gets is the house upon foreclosure. If you have a second mortgage and that money was not used to buy the house, they can try to sue you if their mortgage is not satisfied in the foreclosure. Check with your tax person with respective to the 1099 issue as to the short sale.
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