Legal Question in Real Estate Law in California

I had a first and second mortgage on my home in California and was unable to sell it in 2007 when the market tanked. The first loan of $170,000 was wiped out in the foreclosure and I received a 1099 form, and paid my taxes on these monies. The second mortgage was for about $60,000 owing and I received a call last week, they want about $97,000, which encompasses about $37000 in interest fees.

My financial advisor and I had a meeting, and he called the second mortgage company. They said about $37,000 only was owed and asked how I wanted to pay that. My financial advisor asked what the legal basis of their claim was and the man kept repeating I had to pay the money because I took out a loan. He did offer settlement terms, but did not state what those were.

I left the house because I left California, married and moved to Texas in 2007, and was unable to afford the extra mortgage. My husband just passed away in March of 2011, and I will be receiving life insurance benefits of about $100,000.

I'm concerned the mortgage company might be able to search my accounts and find I have this money and take it. Should I call them, or wait for their call, and (1) ask what the settlement terms are? (2) Ask them for a 1099 form? (3) Do they not have any claim and are they just blowing smoke, and if so, how do I get them to stop calling me?


Asked on 7/16/11, 7:59 pm

2 Answers from Attorneys
Anthony Roach Law Office of Anthony A. Roach

I suggest you speak to a competent real estate attorney in California.

I have several questions, none of which are answered by your post. My first question is whether the same lender that foreclosed on the first held the second. If so, then the second is also wiped out. The second question that I have is when you defaulted on the second. The second is subject to a four (4) year statute of limitations. In your particular case, the statute may have run.

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Answered on 7/17/11, 11:52 am
Kenny Tan Law Offices of Kenny Tan

Also, I would want to find out if the loan was purchase money loan, i.e. not refi. If it is not a purchase money loan, it may be a non-recourse loan in California.

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Answered on 7/17/11, 10:32 pm


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