New York is a quasi no-recourse state in that they have a one action rule. A lender can go for a foreclosure OR sue for the deficiency.
Though CA is a non-recourse state the non-recourse aspect generally only applies to “purchase money” loans (original first).
So HELOCs and equity loans can result in law suits for collection unless the second initiates a foreclosure (not likely here). I expect we will see our own versions of this tactic in CA by lenders taking advantage of those rules.
May take a while though as today’s climate would bring unwanted hostility to lenders going for the jugular of the poor deadbeat. But rest assured they will come for their money sooner or later.
The practice of extracting money out of deadbeats who defaulted on 2nds will be a popular and easy money maker in the years to come. Future earnings beware!
