In real estate world, short sale is a process in which the property under any type of mortgage is being sold at a price lesser than the price which the mortgagor has to recover from sale of the property. And it is up to the bank whether to relieve the house owner from the remaining balance or not. In California, various laws have been established to make the short sale process smooth and convenient. There is dual advantage of the short sale process, first it saves the borrower’s credit history and secondly it saves the bank foreclosure expenses.
Notification Time
In Temecula and other counties of California, most of the borrowers whose property is at mortgage expects to be informed more than a month in advance if the foreclosure is close in time and there are options for short sale. According to the California senate bill 306, the property under mortgage will also include rental space with four or more apartments occupied by the borrower and if the mortgage is at risk than none of these properties cannot be forced at last minute for short sale.
Response Time
In the year 2009, California senate Bill 306 was signed in to law which states the term and condition of short sale. According to this law, the lenders are supposed to respond to the buyer about the property under short sale within 21 days of there call for which there was no deadline. This prevented the chaos of homeowner and home buyer facilitating the short sale process thus making it quicker.
HUD 1
If form 1 From US Housing Department (HUD1) is filled by the California realtors and escrow officer then the fund will get transfer automatically for the sale transaction of the property. In case of escrow transaction the bank/buyer must deny the offer within four days of completion of the process as per stated by the California law to stop the transaction. It helps in streamlining sale of houses that are marked at-risk during entire process. HUD 1 accelerates the sale process and prevents banks from reviewing the final escrow transaction.
Broker Involvement
For California realtor it is mandatory to include both the parties during the sale of property including the short sale under section 10131 of the California business and professional code. According to under section 10139 if any party fails to include a licensed broker during a short sale then it may result in fine or imprisonment.
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