SHORT SALE LENDERS
SHORT SALE LENDERS (SB 931; SB 458)
Important New Law
SB 931 became effective 1/01/2011 and required that a short sale lender waive any right to deficiency as a condition to approving a short sale transaction. This limitation did not apply to second, third and fourth lenders. This means that the short sale seller still had potential liability to lenders in the second, third and fourth positions.
SB 458 sponsored by C.A.R. was recently passed. That Legislation requires that all short sale lenders waive their right to a deficiency as a condition to approving a short sale transaction.
There is now closure when a short sale transaction closes escrow. None of the lenders can pursue a deficiency based upon this new law.
This is great news for our short sale sellers.
©
