SB 931: no short sale deficiency judgements in CA on first TD's
Until now, the laws allowed banks to pursue a homeowner following a short sale for the balance of the deficiency. Many of them did just that, 1 to 6 months after the closing...surprise! Not any more!
Beginning January 1st, 2011 any first mortgage lenders that accept a short sale will not be able to obtain a deficiency judgment against the seller on any FIRST TRUST DEED. This includes purchase money, hard money and refinanced loans.
SB 931 applies to one to four-unit dwellings, non-owner or owner-occupied.
If you have a second or third lien, it is very important that you get the lender to waive their deficiency rights in writing. Our team has had good success doing that for our clients. Please call with any questions or referrals for short sales. We would be glad to give a free consultation.
The legislative counsel's summary of the bill follows:
"This bill would prohibit a deficiency judgment under a note secured by a first deed of trust or first mortgage for a dwelling of not more than 4 units in any case in which the (owner) sells the dwelling for less than the remaining amount of the indebtedness due at the time of sale with the written consent of the holder of the first deed of trust or first mortgage. The bill would provide that written consent of the holder of the first deed of trust or first mortgage to that sale shall obligate that holder to accept the sale proceeds as full payment and to fully discharge the remaining amount of the indebtedness on the first deed of trust or first mortgage."
Of course, this is not tax or legal info so you should contact the appropriate professional before considering a Short Sale, loan modification, DIL or foreclosure.
See my Short Sale and Foreclosure Avoidance Web Site at
http://HAFAShortSaleConsultant.com/
for more information & free reports.
Dennis Smith, ABR, SRES, e-PRO, CDPE, Realtor® DRE# 00476662
Certified Distressed Property Agent
Donna "Sunshine" Smith, SFR, Realtor® DRE# 01249837
Short Sale, Foreclosure Resource Certified
RE/MAX BY-THE-SEA
Buy or Sell a Home with Me, Use my Moving Truck - F R E E for life.
dennis@SanDiegoHomes4u.com
760-436-0087, or cell at 760-212-8225
See my main Web Site for more info and reports
http://www.sandiegohomes4u.com
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