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Sacramento Homeowners: Banks Gotta Do What They Say or Get Sued!!!

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Education & Training with Master Your Market Real Estate Coaching

As a Sacramento real estate college professor and full-time agent, I take a special interest in case law that affects our industry. Basically, whenever a lawsuit involving real estate hits the books, it tends to set precedence, which can clearly have an impact on other people who experience similar circumstances.

 

One the subscriptions as an instructor is to the Bob Bruss Legal Newsletter, so when I read it today, I nearly jumped up and down with joy over this headline: Bank Can Be Held Liable for Oral Promise To Postpone Foreclosure.

One of the biggest issues homeowners who are underwater and in trouble face today is that they try to get a loan modification or do a short sale, then just when they think things are fine, up goes the auction poster on their front door. So sure, the homeowner bears some responsibility for not paying their mortgage, but there's just been too many cases where the bank is full of beans in their mixed communication. Just last week, I had one asset manager tell me she was missing several documents that she already had and orally acknowledged having, and another tell me our short sale package was complete. The day the auction was scheduled on this second house, the bank told me they were missing several documents that they had orally confirmed the day before. The house was sold at auction. So, you can see my interest in this topic.

So in this case law, and I won't bore you with legal-speak, World Savings lost. The article states: "This case reminds lenders that a promise to postpone a foreclosure sale can be enforced in court if the debtor relies upon the promise to his or her detriment."

The comment from the Bruss Newsletter said: "Bank foreclosure department employees must find it hard in today's real estate market to tell homeowners that the bank is going to take away the home. However, any attempts to soften the blow by giving a false sense of hope may put the bank in legal trouble."

So basically a California court held a bank liable for jerking late-paying homeowners around. This is monumental, folks. This case law is tacked on my wall and I won't be afraid to whip it out at any given time a bank tells me one thing and does another.

And a note to homeowners: if you get a notice of default, LIST YOUR HOME ASAP. Don't risk foreclosure...it's just no fun.

source: Garcia v. World Savings (2010) 183 Cal. App. 4th 1031

Tune into my radio show...great for business folks all over and we always cover a few minutes of real estate too!

Tamara

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Visit my blog at www.InLoveWithSacto.tv, Listen to my radio show at www.InLoveWithSacto.com

 

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