Blog Spot

If you live in California,are in the middle of/considering a short sale, the California Association of Realtors press release below will be of a lot of interest to you. Until now, your second mortgage holder could still come after you for the amount of money they lost in the short sale. The entire bill is located in the link at the bottom of the press release.

Before considering a short sale, we urge you to consult with your tax professional. Once you have satisfied yourself, feel free to contact Forefront Real Estate for assistance in selling your home.   


      LAW AGAINST SHORT SALE DEFICIENCIES EXPANDED

In a major victory for REALTORS®, Governor Brown signed into law today a C.A.R.-sponsored bill, Senate Bill 458, prohibiting a deficiency after a short sale for one-to-four residential units, regardless of whether the lender is a senior or junior lien holder.  Effective immediately for transactions closing escrow from this day forward, both senior and junior lien holders cannot require a borrower to owe or pay for a deficiency in a short sale.  This law also prohibits any deficiency judgment to be requested or rendered for senior or junior liens after a short sale of one-to-four residential units.  Any purported waiver of this rule shall be void and against public policy.

Although a lender cannot require a borrower to pay any additional compensation in exchange for a short sale approval, the new law does not prohibit a borrower from voluntarily offering a monetary contribution to a lender in hopes of obtaining a short sale.  A lender is also permitted under the new law to negotiate for a contribution from someone other than the borrower, such as other lenders, agents, relatives, and the like.

Exceptions to the new law include a lender seeking damages for a borrower’s fraud or waste; a borrower that is a corporation, LLC, limited partnership, or political subdivision of the state; a lien secured by a bond as specified; a public utility lien; and additional rules apply if a note is cross-collateralized by more than one property.

This law is fully set forth as Senate Bill 458 (Corbett) at www.leginfo.ca.gov.

Pat Palmer-Realtor/Broker
Real Estate The Right Way
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