I still don't understand. If your 'friend' manages to gain legal ownership of the second house in his name before defaulting on the first mortgage, they will come after everything he owns when he defaults on the first loan. You'll have to explain your... I mean his situation further because that doesn't make any sense. Obviously you can't just 'walk away' from a 200K debt. Your 'friend' knows that, right?
calif is a non-recourse state, and this is a purchase loan for an owner-occupied property, so i think what you said is not true. one other thing for the o.p. to note: if your friend walks away, the lender will file a 1099 to indicate capital gains on the amount that was deficient when they auction the home, so he's gonna owe money regardless.
Blackjack, I think you mean to say California is "non-judicial" foreclosure state...which means there will be no criminal legal action by the bank...but it'll take over the home. Same thing was mentioned on 60-min last night.
Wow, are you serious? I haven't got time right now to click on the link just provided above but I'll be floored if you can walk away from a mortgage, buy another home and not be in danger of having everything you own confiscated by the original lender.
well the law applies to an owner-occupied primary residence. if you bought a second home, i wonder if the bank would claim it wasn't a primary residence and go after it. but regardless, why would you be floored? your credit would be fubar for a long time.