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Do you have to pay back negative equity on a 2nd in CA

I live in CA. My wife and I are getting a divorce. We have a first mortgage of $295k and a 2nd of $230k house is worth $350k. What will happen to the negative equity on the 2nd when we let it forclose on? Will we have to pay that negative equity? We got the second about 2 years ago when the house was worth $650k.


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Open the pod bay doors HAL

I don't know what "negative equity" is. My guess is that the first mortgage will be satisfied, assuming the house sells for 350K and the second trust will receive the balance (55K) with you and your wife (assuming you are both on the note) owing the balance of 175K. 
Posted 2009-08-03T21:10:38Z
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Marin County IS a hat for every different head!

Derek,

Talk with your attorney! My GUESS is that you could face a deficiency judgement since it sounds like a refinance. Here is a link to begin your investigations. I recommend that you review that link and use the further links toward the bottom of the page.
Posted 2009-08-07T17:44:35Z
Tristan Celayeta was invited by Yedda to answer this question.

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Your debts and assets will still need to be covered.  Negative equity is a paper loss.  You have debt (the mortages).  You have assets (houses).  They are set to a present value.  There is no mark to market accounting in divorces.
Posted 2009-08-18T03:04:23Z
JtotheA was invited by Yedda to answer this question.

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