You have to love California laws. They claim to protect homeowners, but it seems to me they are only harming them. I have been trying to work some short sales as an investor and have found that the Title Companies will not issue title insurance for investors if a Notice of Default has been filed. The home seller has a 2 Year Right of Rescission due to any "unconscionable advantage" an Investor might have impossed on the transaction.
So basically they are saying if you are an investor, you will risk the chance of a law suit if a homeowner believes they were taken advantage of.
What about those of us who are abiding by the law and not taking advantage of the home seller, but helping them through the situation? As a buyer, we create a win-win-win situation for everyone! The home seller avoids a foreclosure on their credit, the bank takes a loss, but can recover faster and not have to spend the time, money, and manpower to deal with the foreclosure process and then the sell of the home, and the investor makes a profit by working the deal. I don't see where anyone in this situation is being taken advantage of!
Now the Governor just signed in a bill on July 9, 2008 that requires lenders to contact the homeowner and try to work out a loan modification or forebearance before filing a Notice of Default. This may be our window of opportunity to help the homeowners and still qualify for the Title Companies requirements. If we can get to the homeowner before the NOD if filed, we can make the deal work for everyone without all the circus hoops and fire rings that we have to jump through right now.
Ok I'm off my box for now and on my way to talk to another title company and an attorney to figure this all out.