Latest Short Sale News for California residents

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.

Mirjam

About Mirjam

Sonoma County Real Estate Specialist.
This entry was posted in Buyers, Sellers, Short Sale, Sonoma County info. Bookmark the permalink.

One Response to Latest Short Sale News for California residents

  1. Pingback: Real Estate and Real Life in the Wine Country » Deficiency: shortage, deficit… or paying back what you owe…

Comments are closed.