rick303[at]hotmail.com (rick++) wrote:

- quote -

True. As a practical matter, though, lenders generally
don't go through all the time and expense necessary to get a
deficiency judgment even when a refinanced loan is
foreclosed on.

The reason is that a foreclosure under power of sale
(without court action) can be completed in as little as 111
days. No deficiency is allowed for this kind of
foreclosure.

To get a deficiency judgment, a lender must actually bring a
suit for foreclosure. Which means that the case could drag
on for a year or two, while in the mean time the lender is
receiving no income on their loan but money is going out to
pay attorneys fees.

Most lenders tend to take the path of least resistance.

Stu

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Avoid refinaning.
California bans purchase money deficiencies, which means you
can walk away if you have't refinanced.

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"IOUERG" <iouerg[at]yahoo.com> wrote:

- quote -

Good question. As a general rule, joint tenancy offers the
greatest protection from creditors in California since the
interest of the deceased joint tenant generally passes to
the survivor free of claims against the surviving joint
tenant. However, if you are married, it is quite possible
-- even probable -- that debts may be community property
obligations, and hence a debt of both spouses, irrespective
of the manner in which you hold title to the property.

Community property gives you a step up in income tax basis
for both halves of the community property. Joint tenancy
does not. Community property with rights of survivorship in
new in California and is believed to offer both the
avoidance of probate you get with joint tenancy and a 100%
step up, but I haven't seen any cases or rulings yet that
show the IRS agrees with the 100% step up, but they should
in MHO.

The main drawback of joint tenancy or community property
with right of survivorship is that the first spouse to die
may forfeit the ability to create a Credit Trust or Bypass
Trust that takes advantage of his or her estate tax
exemption. I suggest you consult a tax professional if this
is an issue for you.

Jon Gallo
Los Angeles

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Questions:
We are in California, and filling up a buyer's escrow
information sheet. Which type of ownership is the best to
protect a property from future potential creditors?

Does a type of owenership make any difference for us to be
qualified for exemption of capital gain upto $500k when
selling it in future?

If one sopuse dies, which one has the most advantage in
terms of capital gain tax and/or property tax?

JOINT TENANCY
COMMUNITY PROPERTY
TENANCY IN COMMON
COMMUNITY PROPERTY WITH RIGHTS OF SURVIVORSHIP
TENANCY IN PARTNERSHIP

Thanks in advance,

IOUERG

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