If I default strategically, can a bank come after my home in another state? 5 Answers as of June 14, 2011

I own my home in TX. I have a home in CA with a zero interest loan that is not selling. I am not in default. However, I am considering walking away. Can a CA bank come after my TX home?

Ask a Local Attorney. 100% Anonymous. Free Answers.

Free Case Evaluation by a Local Lawyer: Click here
Bankruptcy Law office of Bill Rubendall
Bankruptcy Law office of Bill Rubendall | William M. Rubendall
There may be a conflict of laws between California and Texas as to collection of judgments. You need to consult with a Texas attorney as to Texas law. A California attorney cannot advise you on law of another state in which he or she is not admitted to practice law.
Answer Applies to: California
Replied: 6/14/2011
Financial Relief Law Center
Financial Relief Law Center | Mark Alonso
Residential loans are typically property specific so defaulting on one would usually not cause an issue with another property.
Answer Applies to: California
Replied: 6/14/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
Maybe. If you purchased the CA home as rental it would not be protected by the anti-deficiency statutes. When you lose a home that you bought as a personal residence and it only has purchase money loans against it- there is no deficiency after foreclosure.
Answer Applies to: California
Replied: 6/13/2011
Law Office of L. Paul Zahn
Law Office of L. Paul Zahn | Paul Zahn
A creditor can file a lawsuit against you for any loss they incur as a result of the default. If granted a judgment, they can then file a lien against any other property you own, including your TX home. A bankruptcy protects you against deficiency judgments and may be something for you to consider. If you are in my area and are looking for an attorney, please contact me for a free consultation.
Answer Applies to: California
Replied: 6/13/2011
Law Offices of Michael J. Berger
Law Offices of Michael J. Berger | Michael J. Berger
The answer to your question depends on several factors. First, you need to determine if the loan on your home is recourse or nonrecourse. If you have a purchase money mortgage and you did not refinance, your loan is most likely nonrecourse. Nonrecourse means that the bank can not come after you for any deficiency after it forecloses on your property. If the loan is a recourse loan, such as a cash out refinance, then the bank can sue you and obtain a judgment against you for the difference between your loan balance and the amount that the bank received for your foreclosed home. Once the bank has a judgment against you, this judgment can be domesticated in other states and used to collect by levying on your assets in other states, like your home in Texas. You DEFINITELY want to consult with an experienced bankruptcy / real estate attorney on this one to be sure that all of the relevant facts have been carefully considered, and to be sure that you get advice that you can rely on.
Answer Applies to: California
Replied: 6/13/2011
Click to View More Answers: