BREAKING NEWS! California Senate Bill 458 – No Deficiency After Short Sale
Great news for South Orange County home owners facing foreclosure. Many home owners fear receiving a deficiency judgement from their lien holders after successfully completing a Short Sale of their home. Now, California Senate Bill 458 that was just signed into law on July 15th prohibits even junior lien holders from seeking deficiency after a short sale. This new Senate Bill amends section 580e of the Code of Civil Procedure so that “No deficiency shall be owed or collected, and no deficiency judgment shall be requested or rendered for any deficiency upon a note secured solely by a deed of trust or mortgage for a dwelling of not more than four units, in any case in which the trustor or mortgagor sells the dwelling for a sale price less than the remaining amount of the indebtedness” We shall see, however, if this makes junior lien holders more or less cooperative on agreeing to a short sale payoff amount since now they will have no ability to pursue the borrower after a short sale. This may end up making junior lien holders more likely to let properties foreclose since their seems to be no amendment to prevent a “sold out junior lien” from pursuing deficiency after foreclosure. Perhaps that will be the next item of legislation that the senate works on.
If you would like more information about short selling your home in South Orange County, please contact me at anytime.
from equityinmotion.com
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July 30, 2011 at 7:14 am, Ramon Del Rosario said:
This is really great news for all former homeowners who underwent a short sale. Leaving your home is a devastating experience especially for the children.
I need help if this law is applicable to me situation. I short sale my house which I had a line of equity at Bank of America. I owe almost $50K. On the short sale documents more than $9K was paid to BOA. After the short sale in June 2010 the bank still pursued me to pay the balance. At this time the bank turnover it to a collection agency and this agency persistently made calls almost everyday.
Please advise if I am covered by this bill.