Yup, Governor Brown signed SB 458 this week. I know this because my husband covers the Capitol for Associated Press. Senator Corbett's bill 458 will extend anti-deficiency protection for all mortgages in a short sale. Presently, SB 931 added Civil Code 580e in January, which prohibited first mortgage lenders from pursuing a seller for a deficiency after a short sale.
SB 458 takes effect immediately as an urgency statute. It applies to 1 to 4 units in California, and only for a short sale. Junior lenders such as a second or third mortgage can no longer pursue a deficiency after a short sale on 1 to 4 units in California.
If you're thinking about doing a short sale in the Sacramento area and have been putting it off, don't wait. Now is the time to call your Sacramento short sale agent to get the ball rolling. I am not certain that this means banks won't still ask for seller contributions if the seller is in a position to pay it and have asked for legal clarification on that.
But it does give a good reason to do a short sale instead of a foreclosure, especially if you've got a hard money loan in second position. I don't know if this will make short sales easier or harder, but at least it will probably protect the people who never got a release of liability because their agent didn't know enough to ask for it.
For me, it will probably mean business as usual. It's too bad it doesn't cover sellers who go through foreclosure, though.
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Certified HAFA Specialist
My Sacramento Real Estate Listings
Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout the four-county Sacramento area. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. DRE License # 00697006.
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