Lenders are agreeing to Loan modification with a nasty twist.  Are you willing to wiave your anti deficiency protection.

Twice in the last week my office was asked to review loan modification paperwork.  Amazingly the lenders are asking the borrowers to agree to waive their protections under california code of civil procedure 580b.  This does not seem that troubling.  580b provides purchase money protection to California homeowners.  But that protection is frequently lost when the home is refinanced. 

However, what was more surprising was the paperwork also state the borrower agreed to waive his protections under california code of civil procedure 726.  Which is the one action rule.  I am not sure if the courts would uphold these kinds of waives under these circumstances. But I would make sure that I spoke with a california real estate attorney before I signed such an agreement.  

In fact if my house was upside down already, I doubt I woulld sign it.  Of course everyones situation should be reviewed carefully.