Is my second loan a recourse loan?


Is an ARM that has already adjusted that is/was a purchase-money second mortgage a recourse loan in the state of California? The loan was never refinanced.

On top of that, if I decide to walk away, could I write myself a check for the available equity and keep walking w/o legal action being taken?

The combined LTV of the 1st/2nd is somewhere around 200%, there is equity available on the second one. It would just happen to push the equity further negative.

I live in California where some loans are protected by the california civil code against banks seeking a deficiency if you default. Like many in the country my wife and I bought a house at the height of the boom and were given an adjustable rate mortgage, however we were lucky enough to be able to refinance it into a fixed 30 year mortgage.

Recent life changes have made it where we are struggling to now make this payment and come the beginning of the year we will definitely no longer be able to afford it due to the birth of our 3rd child. Unfortunately it looks like we will have to let the house go back to the bank.

In looking at the loan paperwork I cannot find anything that states whether or not it is a recourse or nonrecourse loan.

Any help is greatly appreciated.

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