What are legal issues if I purchase a new home and walk away from current one?
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What are legal issues if I purchase a new home and walk away from current one?
Asked on January 4, 2012 under Real Estate Law, California
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If you end up purchasing a new home and let the one that you presently own fall into foreclosure, there is a possibility that you could be responsible for a deficiency judgment if the existing home sells for less than what is owed on the loan and the state that you live in does not have anti-deficiency legislation with respect to purchase money loans (original loan for the home's purchase).
The key to getting an answer to your question is first to determine whether or not your loan for the home that you are living in is purchase money and if so, does your state have anti-deficiency legislation?
In order to get the answers you need, I suggest that you consult with a real estate attorney in your locality about your situation.
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