Re: An answer to foreclosure problems - arson

On Sat, 12 Jan 2008 16:55:26 +0000, EskWIRED wrote:

In misc.survivalism, Curly Surmudgeon <Curly.is.not@xxxxxxxx> wrote:

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.

Actually, I'd say that foreclosure extinguishing the debt is a market
distortion.

I guess that is part of due diligence, be aware going in.

It seems that when you sign a promissory note, you should
live up to its terms. Giving the collateral to the lender, no matter how
badly the collateral is impaired, seems gorssly unfair to me. It
encourages marginal investments to be abandoned, or at least, to prevent
the owner from putting more capital into them.

And makes the lender more cautious.

If you fail to insure, and reap the profit from that, why would allowing
the burned-out hulk to be foreclosed be a fair way to repay your loan?

Rephrase, unintelligible.

Once foreclosure occurs under Spanish Land Grant law

So in Cali you don't use English Common Law as the basis for your real
estate laws? I didn't know that. I thought only Louisianna, using
French law, was the exception to the rule.

No, we use Spanish Land Grant law. That's what I've been telling you all
along. Even in the prior topic where you attacked my statements about
conditions here in California.

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?

Because otherwise, they are incentivized to strip the collateral and sell
the salvage. They do not care how low a price is realized at forcosure,
so the copper and appliances may as well be ripped out and sold.

The property is the collateral. When the collateral is lost so should be
the responsibility for that property. Lenders are more educated and
experienced. If they lend to a market which is in decline then they need
to take responsibility. The consumer is often making the first, or
largest, monetary committment of their lives and taking professional
advice from lenders.

And besides - they signed the promissory note. They owe the money.
Whether the house is sufficient to pay off the debt or not, they owe the
money.

True, but in today's case fraud was involved so mitigating circumstances
are involved.

-- Regards, Curly
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