The Origin: A $70,000 Lesson in the Florida Sun
UpsideDownRealEstate.com wasn’t born in a marketing meeting. It was born in the middle of a personal financial crisis.
In the early 2000s, I was a Carlsbad attorney and real estate broker watching my California home double in value in just three years. Like many, I believed the boom was moving East. So I moved my wife and two small children to Florida to become real estate investors.
The part we got right: Florida did boom.
The part that hurt: The crash was faster.
I watched four investment properties drop 30-40% in value in a single month. The stress was physical. I developed an ulcer and Plantar Fasctiitis in my feet from the constant tension. I felt myself becoming $10,000 poorer every single day.
On my final Florida sale, I didn’t just walk away. I brought $70,000 in cash to the closing table.
Why? Because as an attorney, I knew I didn’t want banks chasing me for a deficiency judgment for the next decade. I understood the legal consequences. But most homeowners don’t.
That realization changed everything.
The Return: Weaponizing California Law
I returned to California with a mission: to ensure no other homeowner had to feel that level of helplessness.
I realized that while Florida had been a nightmare, California’s anti-deficiency protections (CCP 580b, 580d, 580e) offered a legal shield if you knew how to use them.
But there was a catch: You had to sequence your moves correctly. One wrong step like letting the first mortgage foreclose while you had a recourse second and you’d create a “sold-out junior” disaster that could haunt you for years. (that is how some zombie loans were born.)
So I founded UpsideDownRealEstate.com.
It quickly became a national resource for upside down homeowners. My articles caught the attention of Yahoo! and reached the front page of Google not because I was a great marketer, but because I was telling the truth that traditional realtors wouldn’t:
Sometimes the bank is the enemy. And you need a lawyer to negotiate your exit.
The Strategy: 7 Bites at the Apple
Over the next half decade, I helped 600+ California homeowners navigate foreclosure, zombie loans (at the time short payoffs in a pre-zombie state), and short sales using what I call the “7 Bites at the Apple” approach a precise sequencing of legal and real estate strategies designed to maximize your outcome while minimizing what you owe to the banks and the IRS. I note that many people wish to mitigate the risk to their credit as well and that is where an attorney can really shine for the right homeowners.
Here’s what we focus on in:
Recourse vs. Non-Recourse Analysis
We determine exactly what you owe and what the bank can actually collect. This is the foundation of everything. Get this wrong, and you could be personally liable for hundreds of thousands of dollars.
Strategic Default Counsel
We help homeowners understand when to keep the first mortgage current while stopping payment on the second to avoid the “sold-out junior” trap that has destroyed countless families financially. For those with only 1 loan we talk you to you about your goals and design a plan on how to achieve them. We also serve as your attorney so when the banks start calling you can send them to my “client debt collector number” and we get to give them a little bit of the medicine they like to give you. We also provide you with cease and desist letters and help you extend your stay in your home for close to a year and maybe more if you prefer.
Zombie Loan Defense
We protect homeowners being chased by “sold-out junior” or ignored liens from 2008 that are resurfacing in 2026. Leveraging California’s new AB 130 law (Section 2924.13 to the California Civil Code) , we will attempt to force lenders into negotiated settlements for pennies on the dollar. We can also discuss the merits of a Quiet Title action in superior court when may be a better strategy than a lien strip in a Chapter 13 bankruptcy.
Attorney-Guided Short Sales
We provide legal leverage and protection which non-attorney realtors can’t offer helping ensure the bank’s approval letter actually releases you from the debt, avoiding the 1099-C tax trap, and protecting you from future lawsuits.
The Prediction That Came True
In 2009, I started advising underwater homeowners to keep their first mortgage current but stop paying their second if it had no equity.
The logic was sound: If the second couldn’t foreclose (no equity to recover), and the statute of limitations eventually expired (4 years in California), the debt would become legally uncollectable. The lien would remain, but the homeowner could stay in the house indefinitely.
We called these “strategic defaults.” Others would later call them “zombie loans.”
CA Law helped create California’s zombie loan problem. and now Perhaps CA law can wipe them out. Call us.
Why 2026 Is the Time to Act
With the passage of AB 130 (Civil Code § 2924.13) and the new AB 2424 foreclosure postponement rules, the legal landscape has fundamentally shifted.
AB 130 gives us unprecedented leverage against zombie loan holders. The leverage may not really be needed because we do have a statute of limitations but if the lenders make unforced errors in an attempt to collect the loan or foreclose you may be in a really strong position to eliminate them in court or settle them for pennies on the dollar. We will be happy to discuss you options with you on the phone.
AB 2424 allows us to extend foreclosure timelines by a mandatory 90+ days, giving homeowners breathing room to negotiate, plan, or execute a strategic exit.
These laws are being challenged. It might be a great time for you to leverage them now.
Whether It’s a Zombie by Design or a Zombie by Mistake
Some zombie loans were created intentionally, homeowners who followed my advice in 2008-2012 and stopped paying their seconds while keeping their firsts current.
Others were created by accident, short sales where the lien was never properly released, or loan modifications where the second was “forgotten.”
Either way, UpsideDownRealEstate.com is the headquarters for your workout.
We’ve been doing this since 2007. We’ve executed 400+ short sales, created hundreds of walkaway plans, and settled dozens of zombie loans for 4-40 cents on the dollar.
We predicted this crisis 15 years ago. We have the proof on YouTube and the Wayback Machine.
And now, with AB 130 and AB 2424, we have more legal tools than ever before.
The Bottom Line
I learned the hard way by bringing $70,000 to a closing table in Florida that California is a much better place to borrow money to purchase a home. Knowledge of CA law and the ability to leverage it is a powerful tool to wield against the banks.
That’s why I built this site. That’s why I’ve spent many years helping homeowners understand California’s anti-deficiency laws, negotiate with lenders, and exit their situations with dignity.
If you’re facing foreclosure, dealing with a zombie loan, or considering a short sale, you’re not alone.
And you don’t have to figure this out by yourself.
John McConnin
Let’s talk.
(858) 324-8855
About Us
Founder – Owner John McConnin
UpsideDownRealEstate.com was founded by John McConnin to solve a specific problem: California homeowners being forced into complex legal financial situations without legal representation.
As both a California Licensed Attorney (Bar #154852) and a Real Estate Broker (DRE #01445675), John has spent over 30 years at the intersection of law and real estate. Our team doesn’t just list homes; we architect walk-away plans.
The Upside Down Track Record:
- 200+ Short Sales successfully negotiated and closed as a Real Estate Broker
- Hundreds Drafted and Counseled Clients on Strategic Defaults, Walk-away plans , cash for keys.
- Dozens of Short Payoffs advised. (zombie loans included)
- Thousands of California homeowners educated on the ‘optimal path’ to asset protection and debt freedom.
We believe an educated client is the best customer. Whether you are facing a foreclosure, a ‘Zombie Loan’ from 2008, or a complex short sale, we provide the legal-first strategy required to protect your future.”
Co-Founder (honorary) – Phil Mills, Realtor
“Phil Mills brings over 22 years of high-volume real estate experience to the UpsideDownRealEstate.com team. Licensed in both California (DRE #01893077) and Arizona, Phil has successfully navigated every market cycle since the early 2000s.
Phil’s expertise isn’t just in sales, it’s in complex property workouts. He has personally renovated and sold over 20 properties and has been a trusted resource for asset managers and law firms, managing specialized foreclosure allocations and distressed asset liquidations.
Phil’s Professional Footprint:
- 500+ Transactions closed across CA and AZ. Phil and his team had negotiated over a 100 short sale before he joined our brokerage for the legal leverage. A good short sale team must have at least one person on it who has negotiated dozens of short sales with different lenders.
- Expert Negotiator: Specialized in flat-fee efficiency and non-traditional sale models that prioritize the seller’s net.
- Distressed Asset Specialist: Years of experience managing REO and foreclosure files for institutional clients.
Whether he is analyzing a property’s renovation potential or managing a complex short sale from his Arizona or California hubs, Phil’s goal is the same: providing the tactical execution that turns John’s legal strategy into a closed escrow.”