A new bill was passed quietly in Sacramento and went into effect July 15, 2011. California SB458 expands on a previous short sale law already in existance in California. It stipulates that with regards to short sales only, the first lien holder is the only one we now have to negotiate with. The subsequent loans, including HELOC loans must now forgive all debt after a short sale.
This may mean that the subsequent loans may want more money through escrow. However, the law also stipulates that the banks can no longer ask for CASH CONTRIBUTIONS from the seller which is fantastic! Really, if I have to short sale my home, do I have cash to give to you? DUH!
The other downside I can see is if the homeowner has the first and second with the same bank. The bank will either try to negotiate a crazy price or simply foreclose and not deal with the short sale altogether. This should help with the time it takes to complete a short sale. Hopefully, as the word spreads among the real estate community, the short sale process will begin to speed up and we will no longer have buyers backing out because of the time-frame. YEA! This law does not apply to foreclosures, unfortunately. It seems to me that those people need the help, too. Maybe even more than the people willing to short sale. Anyway, good information for home sellers and homer buyers alike!
CALIFORNIA LIVING!
Warmest Regards,
Linda K. Mayer,
A Realtor you can Trust!
(626) 824-8927 Cell
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