A look at the big mortgage settlement provisions

Cox Castle & Nicholson partner Ira Waldman was interviewed in a Sunday, February 12, 2012 issue of the San Francisco Chronicle about mortgage settlements for people who are underwater and have stopped making payments or are on the verge of doing so.

He told the Chronicle that if the homeowner refinances that loan or takes out a second mortgage that is not used to buy the home, the lender - following a judicial foreclosure - can get a court order that allows it to pursue the homeowner for the difference between the fair market value of the home and the loan balance. This is known as a deficiency judgment.

But this is not regularly done in California unless the unpaid balance is very large and the lender thinks the borrower has a lot of other assets, Waldman said.