I am in foreclosure proceedings in California.
I have 80/20 adjustable rate financing that adds up to about 180% of the current home value. The payment skyrocketed and I was unable to refinance. The lenders refused to negotiate a modification, and now that I have moved out and stopped paying they are singing a different tune, but it's too late.
I hired a real estate lawyer to examine my loan documents before I moved out and stopped paying. I know I am protected from judgements and leins under California law because both of these notes are Purchase Money loans for a primary residence. I know I am protected from Tax Liability on debt forgiveness under current laws... But I do have questions:
What happens to my escrow account? The primary note holder just paid the property tax bill and insurance bill, leaving a negative escrow balance.
Can they get a judgement for the escrow balance? Will they bother? Can I pay the escrow balance immediately, and if so how do I make sure they credit it there and not to the loan?
Please reply only if you are familiar with California law. this is different than other states and has additional consumer protections.
Am I missing anything else?
Thanks for the help...
