California law has changed regarding a lender’s ability to obtain a deficiency judgment after a short sale on a 1-4 unit residential dwelling. As a result of SB 458, any lender who agrees to a short sale, meaning not only the 1st lender, but also any junior lender(s), can no longer require a borrower to owe, or to pay, or take action against the borrower so as to collect a deficiency judgment.
Furthermore, lenders are no longer permitted to require the borrower to contribute any monies, other than the proceeds from the sale of the property, as a condition of the short sale negotiations and approval.
The legislation was passed as Urgency Legislation and went into effect the day it was signed by Govenor Jerry Brown, on July 15, 2011.
If you know anyone having a difficult time maintaining their house payments and close to losing their home in foreclosure, please have them give me a ring at 805-856-9350. I will be glad to discuss with them, at NO cost or obligation, their options.
