Re: An answer to foreclosure problems - arson

On Fri, 11 Jan 2008 16:54:44 +0000, EskWIRED wrote:

In misc.survivalism, Robert Sturgeon <rsturge@xxxxxxxxxxx> wrote:
On Fri, 11 Jan 2008 12:07:36 +0000 (UTC),
EskWIRED@xxxxxxxxxxxxxxxxxxx wrote:

In misc.survivalism, knews4u2chew@xxxxxxxxx wrote:


The whole idea is stupid.
#1. Insurance only covers the structure.
#2. Land can be more than half of the value of a property covered by a
mortgage.

Or it can be a small fraction. Houses are worth the same wherever you
plop them down; land is a huge variable. And 1/8 acre in some godforsaken
suburb of a broken-down rustbelt city isn't worth all that much.

#3. The borrower will still have a mortgage if they don't rebuild and
the lender will take the insurance proceeds.

All true, but maybe the deficiency judgement will be for an affordable
amount.

In California and, IIRC, most states, there is no deficiency
judgment on purchase money loans.

Not true here, but you may be correct about "most states". I don't know.

I wasn't aware of Deficiency Judgements despite 25 years in California
real estate as an investor until mentioned here a short time back. Such a
vehicle would massively distort the market from what we experience in CA.

When a loan is taken out that asks for notification if a senior loan goes
deliquent. The Lender files a document for notification of deliquency.
For example if a property here has 3 loans and they all go delinquent at
the same time, with the County Recorder that notifies the next junior
lender when title search is done pending foreclosure. The junior lender
has the option of paying the former completely or losing their euity
entirely. The second would notify the third lender giving them the option
of redeeming the delinquencies or losing their equity.

This pressure on the junior lenders to resolve senior lender deliquencies
forces the more senior loans paid at the expense of junior lenders who
would be wiped out I've never heard of a deliquency judgement.

Once foreclosure occurs under Spanish Land Grant law all obligations are
wiped out and clear title is issued to the buyer. This gives reason for
settlement and avoids a lot of trial. It's also why 3rd loans are a lot
more expensive than 2nd's, which are more costly than 1st Mortgages. This
is true in Latin Americ too, I thought it was universal.

Its actually difficult for me to conceive of the seller being enslaved for
a bad economic decision with a bill for foreclosure. They've lost their
home, investment, are destitute and perhaps homeless. How do you expect
them to recover when a deficiency judgment hangs over their heads? You
can't squeeze ... turnip, etc.

-- Regards, Curly
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