If your home is considered residential 1-4 units, then yes, according to CAR legal series you are relieved of debt obligations. However, be aware, that there are many changes happening on the local and national level each month. They are in favor of the homeowner's doing short sales. Make sure you hire a seasoned short sale agent and potentially speak to legal counsel. A good short sale agent will have these resources for you. See below for exact info, part of an on-going series:

II.  Effect on Borrowers of Short Sales

Q 8.  Is the seller in a short sale relieved of all debt obligations owed to the lender?

A  In general, as long as the property is a residential 1 to 4, then yes a seller in a short sale will be relieved of all debt obligations owed to the lender (see series 4).

However, for all other types of property the answer is more nuanced.  Each lender is different, but some have borrowers sign a short sale agreement that releases the lien on the property without cancelling the promissory note. This allows a short sale of the property to proceed while at least potentially leaving the borrower responsible for any deficiencies on the loan. While there are no cases directly on point yet, it would appear that the anti-deficiencies statute that protects borrowers in foreclosures (Cal. Code Civ. Proc. § 580d.) do not apply when the property is sold as in a short sale.

Short Sale Designation CAShort Sale Designation CA

Kim And Kristine Halverson

Exclusive Representation of People & Their Properties

Prudential California Realty
3130 Wilshire Blvd Suite 100
Santa Monica, CA 90403


call: 310-737-8173
email: info@kimandkristine.com
web:  www.KimAndKristine.com

Short Sales, Luxury: www.ShortSaleInSantaMonica.com

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10 Comments on Are Homeowners Relived Of All Debt Obligations When Doing A Short Sale, Series 8

MAR
16
2012

Great explanation on Short Sales informing your readers that each lender is different and many changes occur with every month that comes in. Santa Monica Short Sale Agents like you two are really good in keeping your clients well informed. Best of luck to you two!
7:07am • #1
217,988 Points 2 Featured Posts

Bas: Thanks!  We wish you all the best.  :) Kristine
9:25am • #2
1 Featured Post Outside Blog

Great post for those considering a short sale, Kristine & Kim!
12:17pm • #3
217,988 Points 2 Featured Posts

Troy:  Thanks for the support.  Homeowners need to know there are options.  Kristine :)
4:22pm • #4
MAR
23
2012
2 Featured Posts

You explained it very well, and i agree it takes a good Santa Monica Short Sale Agents to help them through the changes in the market and guide them to the proper way in dealing with this changes.
5:53pm • #5
MAR
26
2012
187,038 Points 1 Featured Post Outside Blog Hit Router Attended Rain Camp

Working with an experience Santa Monica short sale agent is key to knowing what the real story is with short sales.
11:36am • #6
APR
13
2012
217,988 Points 2 Featured Posts

Stephanie:  Dealing with changes is key to short sales.  Well put!

Jessica:  Knowing what the real story is with short sales in Santa Monica makes all the difference.  Kristine
12:33pm • #7
NOV
03
1,568,684 Points 279 Featured Posts Localism Sponsor Outside Blog Hit Router Attended Rain Camp Called Shot Master

Hello Kim&Kristine, I'm glad you guys are doing great. Keep up the good work. Great share of a comprehensive Short Sale  Report. Continue doing great as Santa Monica Short Sale Agent. 
4:46pm • #8
NOV
15
Outside Blog

Excellent post as always! You two are great Santa Monica short sale agents. Keept it up!
5:17pm • #9
Outside Blog

Top Santa Mionica Short Sale Agents like you really think in terms of presentation. Great share here!
5:51pm • #10


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Kim & Kristine Halverson Realtors® Santa Monica Real Estate, CA (www.KimAndKristine.com, Santa Monica Real Estate :) ) Rainmaker_large

Kim & Kristine Halverson Realtors® Santa Monica Real Estate, CA

Santa Monica, CA

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www.KimAndKristine.com, Santa Monica Real Estate :)

Address: 3130 Wilshire Blvd Suite 100, Santa Monica, CA, 90403

Office Phone: (310) 737-8173

Cell Phone: (310) 309-9130

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Author Bio: Kim & Kristine Halverson are Realtors in Santa Monica at Prudential CA Realty. Kim & Kristine are sisters, and have close to 20 years combined experience serving buyers and sellers in real estate.

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