Under a new state law, any lender who agrees to a short sale, which by definition will yield insufficient funds to cover the outstanding loans on a property, must accept it as payment in full for all loan balances. That is a good thing for upside-down homeowners who need to sell, says the California Association of Realtors.
In a prepared statement applauding Gov. Jerry Brown for signing SB 458 into law, the association observed that previously a first mortgage holder could accept an agreed-upon short sale payment as full payment for the first mortgage but a junior lien holder could still hound the seller for the full amount owned on the junior lien.
“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 association President Beth L. Get more info…
