- 12 - sale of the Oakland home would be exempt from Stephanie’s creditors. Petitioner also had conversations with David about the debt. Petitioner felt that David honestly wanted the loan to be paid but concluded that David was not in a position to make payments. In August 1995, after consulting with a real estate agent about the value of the Atascadero property, petitioner accepted a deed in lieu of foreclosure to the Atascadero property from David and Stephanie to avoid losing his security interest. The deed states that it is in full satisfaction of the obligations secured by the first deed of trust in favor of Great Western. The deed was executed by David on August 11, 1995, and by Stephanie on August 21, 1995. The fair market value of the Atascadero property was $207,500 at the time the deed was executed. The outstanding balances on the loans from Great Western and petitioner’s profit-sharing plan were $168,957 and $170,371, respectively. At the time the deed was conveyed to petitioner, neither Stephanie nor David had made any principal payments on the Atascadero loan. Petitioner did not pursue a judgment in the California courts for the balance of the loan because he believed that California’s antideficiency statute, section 580b of the California Civil Procedure Code (2002), precluded any recovery. Petitioner made the monthly payments on the Great Western loan from September 1995 through December 1995. Petitioner paidPage: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
Last modified: May 25, 2011