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SB 458: New Protection For Homeowners Doing Short Sales
New Protection For Homeowners Doing Short Sales
On July 15th, 2011, Gov. Jerry Brown signed SB 458 into law with an urgency clause making it effective immediately.
“The signing of this bill is a victory for California homeowners who have been forced to short sell their home only to find that the lender will pursue them after the short sale closes, and demand an additional payment to subsidize the difference,” said C.A.R. President Beth L. Peerce. “SB 458 brings closure and certainty to the short sale process and ensures that once a lender has agreed to accept a short sale payment on a property, all lien holders – those in first position and in junior position- will consider the outstanding balance as paid in full and the homeowner will not be held responsible for any additional payments on the property.”
Junior lein holders tend to get the proverbial “shaft” in the short sale process (usually a $3-6K contribution, regardless of how much is owed). Many are known for requesting/requiring a promissory note to be held by the seller after the short sale closes, in order to achieve short sale acceptance. This will no longer be allowed.
Once a short sale ... more
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