[quote=UCGal]To make matters worse – original purchase money loans (first and seconds trust deeds gotten at time of purchase) are NON RECOURSE in CA. Only refi’s and HELOCS that occur after the purchase are recourse.[/quote]
For the life of me (I wasn’t working in RE when this practice became common), I HAVE NO IDEA WHY ANY LENDER (either the one holding the 1st TD or a diff. one) would subordinate themselves to themselves or to the 1st TD holder at the time of purchase and make a 2nd “purchase money” loan (for a dn. pymt. perhaps?) and obtain a 2nd TD (purchase $$ NON RECOURSE paper) from the “buyer” in their “favor.” How risky is that??? It’s effectively 100%(+) financing and makes absolutely no sense at all to me.
These lenders must have been two jokers short of a full deck.
