This new California law (SB 931) was signed by the Governor on September 30th, which takes affect from the beginning of January 2011. According to this law, any first mortgages that accept a short sale cannot obtain a deficiency judgment against a seller, whether it is owner occupied home or non-owner occupied owners.
So, the good news is that for owner occupied owners and also investors who own 1-4 units, now they don’t have to worry whether lender will come after to collect the remaining balance.
Now, here’s the great news – This law applies to all type of first loan whether it is a purchase money loan or refinanced loan. If a lender agrees to a short sale on first mortgage then that lender must accept the sale proceeds as their full payment and fully release the seller from any deficiency.
I have personally negotiated and closed many short sales in bay area with all the major lenders and one of my main goal in short sale is to get the deficiency judgment waived for my clients. You can read for more details on SB931.
As a Bay Area short sale specialist, I know this is really important for my clients to get a full release whether purchase money or refinanced. So, if you are a homeowner whether occupied or non-occupied (investors) and having difficulty with your mortgage and selling the home is the only option, then call me at 510-366-9405 for a FREE consultation to know your options and how you can avoid foreclosure.
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