Full question:
I am trying to refinance my home. But every time I am turned down because of my wife's credit score. She got foreclosed on many years ago but she still shows up on the mortgage. The new owner refuses to take her off and is often late with the payment, killing her credit. The bank says they can't do anything. How do I put a lien on the property? What is the process and what is the form I need to purchase?
- Category: Real Property
- Subcategory: Liens
- Date:
- State: California
Answer:
Foreclosure is the procedure by which a party who has loaned money secured by a mortgage or deed of trust on real property (or has an unpaid judgment), forces the sale of the real property to recover the money due, unpaid interest, plus the costs of foreclosure, after the
debtor fails to make payment. There are different types of foreclosure, including foreclosure by judicial sale, which involves the sale of the mortgaged property done under the supervision of a court, with the proceeds going first to satisfy the mortgage, and then to satisfy other
lien holders, and finally to the mortgagor. Judicial foreclosure is typically used when the amount due is greater than the equity value of the real property, and the lender wishes to get a deficiency judgment for the amount still due after sale. Foreclosure by power of sale, involves the sale of the property by the mortgage holder not through the supervision of a court when a power of sale clause is included in the mortgage. This type of foreclosure is often subject to judicial review at a later date due to issues about title that must be resolved by the court, including actual defects in the deed, and the priority of various lien holders and lessees on the property.
In many jurisdictions the mortgage holder is prohibited from seeking a deficiency judgment if the holder chooses to sell the property through extra-judicial means. In many jurisdictions, a deed of trust is required in order to conduct a foreclosure by the power of sale. A voluntary foreclosure involves selling the home to the lender. Voluntary foreclosure may be pursued to minimize the damage to the debtor's credit record associated with involuntary foreclosure. In a voluntary foreclosure, the debtor may not be held liable if the home sells below the debt amount.
When the foreclosure sale is not enough to satisfy the amount of the mortgage, under certain circumstances, the mortgage holder may bring a deficiency judgment against the mortgagor to make up the difference. If the purchaser fails to make the mortgage payment the property is foreclosed and title is obtained by the lender through a legal procedure. The property is then typically sold to pay the mortgage and a deficiency between the sale price and the outstanding balance of the mortgage usually exists. Some states have anti-deficiency laws which
protect purchasers of residential real property used as primary residence. Under some anti-deficiency laws, if the mortgage is a purchase money mortgage for the purchase of a dwelling occupied by the purchaser, the purchaser will not be held responsible for any deficiency. The lender can only recover the property and the proceeds of a subsequent sale. The purchaser does not pay any deficit between the sale proceeds and the outstanding loan balance.
California's anti-deficiency law applies only to funds used to purchase a residence. The anti-deficiency law does not apply to additional financing such as second mortgages or home-equity loans. California requires foreclosure on real property trust deeds and mortgages instead
of a suit on the note. No deficiency judgment is possible where the seller takes back a purchase money note and deed of trust as part of the sale financing. If a third-party lender finances the purchase, the third party cannot recover a deficiency judgment if that loan is given and
used for paying all or part of the purchase price, is secured by the property purchased, is a property for use by no more than four people, and is owner occupied. A deficiency judgment is not available if the lender forecloses by private sale by trustee instead of a judicial foreclosure law suit. Federally made or guaranteed loans are generally not subject to the anti-deficiency laws of the state. V. A., FHA and Small Business Administration loans may subject the borrower to a deficiency judgment. A third-party refinance of a purchase money loan is not a purchase money loan and the buyer could be personally liable for payment of the seller's note after a judicial foreclosure.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
