80/20 foreclosure

[medic6149]

What is the name of your state? ca
I had an 80/20 with Litton Loan Services which was foreclosed on in Dec. 2007. The 1st on the house was $410,000 which is now in REO. I have been receiving collection calls on the 2nd for the $98,000 balance which apparently is now considered an unsecured debt. I have no assets and really no way of paying the $98000. 3 questions: 1) What are the chances a judge will award a judgement to Litton for the balance? 1) Don't they have to sell the house first before they can seek a judgement for the second to try to remedy their loss? 2) Does the bill that Pres. Bush signed protect me from a judgement for the second?
What should I do? Ch. 7 is not an option due to the strict income levels.

Thank you,

ABS

[FlyingRon]

Depends on the nature of the original note(s) and how the property was foreclosed. If both loans were issued to acquire the property or a non-judicial foreclosure happened the lender may be barred from pursuing the deficiency.

If there was a foreclosure (judicial or non-judicial) the house was SOLD. It just may be that the original lender was the purchaser.

The act signed won't affect this situation. What it does is avoid any tax liability you might have if the lenders formally "forgive" your debts.

[medic6149]

The 80/20 was a refinance. Does this make a difference?

[FlyingRon]

Well, that's where you got me. Perhaps one of the Californians can answer that. Federally, a refi of an acquisition loan is still an acquisition loan. I would suspect (with wavering confidence) that as long as the refi was purely to replace a previous acquisition note(s) then you're still exempt from deficiency actions. However, if you refi'd to take money out, you'd be open to that action.