SB 931, recently enacted legislation governing “short sales,” goes into effect Jan 1, 2011, The Legislation applies to any note secured by a first deed of trust or first mortgage for a dwelling of not more than four units. SB931 protects Homeowners as well as Investors, as it is not limited to consumer transactions, nor limited to homeowner occupied dwellings.
…it specifically states that it doesn’t matter if the first note or mortgage was refinanced or not, can be for any amount, and is not limited to owner-occupied dwellings.
So SB931 and California Code of Civil Procedure 580e will give Sacramento Short Sellers exactly the same protection to first deeds of trust and first mortgages.
When this happens, Short Sales in Sacramento will surely increase- no more will homeowners and investors be told by their attorneys to “just let it go back to the bank”. You see, in the past, if a loan was not “purchase money” the law stated that in a short sale, the bank had the right to pursue a deficiency judgement for the amount the bank lost: the amount between the short sale and the amount owed. If the home went to foreclosure, there was no such risk…
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