When is Enough, Enough?

Get this..Most California homeowners don't know that when you refinance your loan, you can loose your legal protections..

California has protected borrowers from so called "deficiency" liability on their home loans since the 1930's, but the evolution of mortgage finance requires the statue to  be updated!!

Current law states that if a homeowner defaults on a mortgage, the homeowners liability on the loan is limited to the property itself.  This law has worked well since the 30's to protect borrowers and allow borrowers who are brought down by financial crisis to get back on their feet!

Unfortunately, the 1930's law does not extend the protection for purchase money mortgages to loans that re-finance the original purchase debt--even if the re-finance purpose was only to gain a LOWER interest rate.  Recent years of historically LOW interest rates have induced Thousands and Thousands of homeowners to re-finance their home loans to obtain a lower rate, yet almost none of them realized that by re-financing their mortgages to obtain a lower rate, they were forfeiting their protections.  These borrowers became personally liable for the entire balance of the loan. 

Homeowners didn't know that their re-finance exposed them to personal liability, and new tax liability, on the note.  It is unfair and unethical to allow a lender, or someone that has purchased a note from a lender, to pursue a borrower beyond the value of the agreed upon security (your home)!!

Do not let this happen California!!  Call your legislator now!