California | Real Estate Law
8/25/09, 8:22 pm
Legal Question
Can i do a loan modification with a abstract of judgment.
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Can i do a loan modification with a abstract of judgment.
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Read More Answered By: Larry L. Doan |
This doesn't make sense. Whose judgment? A judgment for you or against you? A judgment has nothing to do with getting a loan mod. You should repost. |
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Read More Answered By: Bryan Whipple |
I assume you are asking whether the recording of an abstract of judgment against you will have an effect on your ability to work out a loan modification with your lender.
Well, it doesn't absolutely prevent you from getting a loan modification. On the other hand, it is a major obstacle to what is (apparently) an already difficult process. I assume that the abstract of judgment is junior to the loan you're trying to modify in terms of priority (date of recording). One of the problems is that an abstract of judgment of any size is a negative fector in any lender's consideration of your stability and credit-worthiness. The other is that modifying a senior obligation and re-recording it as modified (or even not recording the modification) MAY cause the senior lender to be subordinated to the judgment.
I have spent some time researching the question of whether revising the terms of a senior loan causes it to lose its place in the time-determined pecking order under the recording laws, and I find a wide split of authority. However, I think the mere possibility that a lender who is now in first position could drop back into second or lower position due to fiddling with the terms of their loan would be a significant deterrent to doing so.
So, I think a judgment has a lot to do with getting a loan mod. |
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