LATEST NEWS : A lot of home owners have 2 mortgages against their property, we call that a senior and a junior loan. These second loans may be a home equity line of credit or a regular loan. This second loan was always nasty to deal with, it survives a foreclosure and usually you still owe on it after closing. UNTIL NOW…
Earlier this week Governor Brown signed into law 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 lienholder. Effective immediately for transactions closing escrow from this day forward, both senior and junior lienholders 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.
This means that there still is quite a bit to negotiate with lenders involved in a short sale. The good news is: when all is said and done and the deal closes, it’s DONE!
Great news I wanted to share with you, please spread the news to your friends and family. A short sale is a dignified solution for a difficult situation.