[CITY] Real Estate News

(Here are Realty Qwest we pride ourselves on being constant advocates for our clients and homeowners throughout California.  Our entire Team.... from Realtors to Management, from Admin to Support Staff have supported and worked hard on this campaign.)

Finally, In a major victory for REALTORS®, Governor Brown signed into law 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 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.

Please note that this adds to the long lists of reasons why a short sale may be the right choice for most.  Keep reading.

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 will be interesting to see how this unravels.  We have seen some aggressiveness already from several lenders and loan servicers.

There are some instances where we will not see these same rules apply.  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.  We here are Realty Qwest always encourage our clients to stay at the forefront of the constant changes to the Real Estate industry.  Real Estate is our  passion and we hope  that you can continue to find our Blog a resource that you keep coming back to.  Please contact us anytime for more information about how these laws may or may not affect your situation.  With the clock ticking on the Mortgage Forgiveness Act of 2008 about to hit its deadline...many of us don't really have time to waste.