Countrywide - Owner then rented -- purchase money -- deficiency??

[bubbs]

What is the name of your state (only U.S. law)? California.

If you could advise me of the following based on my situtation, I would appreciate the help.
1. Can Countrywide come after me for the deficiency amount through a judicial judgement?

2. Will I be able to prove I'm insolvent for the year?

Details:
Home purchased 11/2004
Loan was purchase money - never refinanced, pulled home equity $
I lived in the house until 2006.
Tried to sell it couldn't, have had tenants in the house for 2 years.
I pay $800 out of my pocket for this house - rent does not cover payment (includes principal, interest, insurance, taxes)

I've called and asked if I could get a loan modification, no luck. It is not currently my primary residence, and my loan is at 6% for 30 years.

On the Deed of Trust, under the Transfer of rights in the property, there is a statement "The Security Instrument secures to Lender: (i.) the repayment of the loan, and all renewals, extensions and modifications of the Note; and (ii) the performance of Borrower's covenants and agreemetns under the Security Instrument and the Note. For this purpose, Broorower irrevocably grands and conveys to Trustee, in trust, with power of sale, the following described property, ADDRESS"

Does this cover me in the Judicial Foreclosures in California - Code of Civil Procedure Section 580(a) -- Anti-Deficiency Law not allowing the bank to come after me for the deficiency amount?

Insolvency - The amount on the loan is $220K the house might sell for $80K. My current house has a loan of $260K worth about $260. 1 car owe 11K worth 15K, a couple of credit cards at $5,000.

I was told based on my 2008 taxes, if the house sold for $80K I would get a 1099C for about $32K

Thanks for reading and offering advice.

ChristineWhat is the name of your state (only U.S. law)?

[FlyingRon]

Yes, you should have a non-recourse loan there.

You will get a 1099 for the difference on what you OWE and what they netted out of the foreclosure. The taxable income of that to you is whatever your tax rate is. You look like you may qualify as insolvent. Obviously this house doesn't qualify for the exclusion under the recent debt forgiveness legislation.