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Tuesday, November 16, 2010

No Deficiency Judgement Allowed

SHORT SALE DEFICIENCIES, HISTORY FOR FIRST TRUST DEEDS?Hold off closing escrow if your short sale approval has a deficiency clause.times up
Why? Because as of January 1st of next year (2011) California Senate bill 931 kicks in.This new law will prohibit your first trust deed lender from going after you for any deficiency. No Deficiency Judgment allowed!
They CAN NOT obtain the dreaded deficiency judgment against you after your short sale. 
Providing written consent to a short sale will obligate the first trust deed lender to accept the short sale proceeds as full payment and discharge any of the amount still owed on the loan.
This law will generally apply to first trust deeds that are secured by one-to-four residential units.
SB 931 will 
not stop a lender from seeking damages for fraud or waste by the borrower.