In the state of California, can a second loan be targetted for a law suit?

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I know peole that have walked away from their mortgage. They purchased other propetry to live in with that second mortgage. They bragg about the cars and property they got. However, what are they liable for? I have always paid my mortgage on time until paid off. I guess I do not understand this new mindset. Does not seem fair. Maybe I just do not understand this.

  1. Reply
    April 29, 2011 at 9:02 pm

    They probably got the second one before filing bankruptcy.

  2. Reply
    April 29, 2011 at 9:51 pm

    They probably did a “wrap” with the second. What that means is they put both properties up as security for the loan. When they defaulted on the first, they probably continued to pay the second. The lender on the second is still secured by the second property and really doesn’t care about the other property. As long as they get paid, it’s not their problem. The property they walked away from will go back to the bank or be sold to someone at auction. The borrower will not have to pay any deficiency in California. So they don’t care about that either.

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