La Quinta Short Sales Get More Protection From New California Law

On July 18, 2011, California Governor Jerry Brown signed into law Senate Bill 458. This new California law will further protect homeowners pursuing short sales by barring first and second lien holders from going after sellers for money owed after the short sale closes.

A short sale is a transaction in which the homeowner owes more on the loan than what the property is worth. Because the amount owed to the lien holder(s) will be “short” of what is currently owed by the borrower, the lien holder(s) must first approve the sale of property.

SB 458 builds on the protections offered by a previous law, SB 931, which required the first lien holder in a short sale to accept an agreed-upon payment as the full payment for the outstanding loan balance.

The previous law did not address junior lien holders. SB 458 brings certainty to the short sale process, ensuring that once a lender has agreed to accept a short sale payment on a property, all lien holders – including those in first position and junior positions – must consider the outstanding balance as paid in full. The homeowner will no longer be held responsible for any additional payments on the property.

About the Author
Brad Schmett is La Quinta’s Real Estate Market Specialist. Brad and his team provide sellers with information and resources that help them best position their real estate for sale and they work with buyers to maximize their residential real estate investment. Brad can be reached at (760) 880-5845 or www.LaQuintaRealEstateInfo.com.

About Brad Schmett

La Quinta Real Estate Market Specialist. Brad and his team provide sellers with information and resources that help them best position their real estate for sale and they work with buyers to maximize their residential real estate investment.
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Brad Schmett Real Estate Group
eXp Realty of California, Inc.
78065 Main Street, Suite 204
La Quinta CA 92253
760-880-5845
Brad@BradSchmett.com

Disclaimer: Brad Schmett Real Estate Group and eXp Realty of California, Inc. are not affiliated with or endorsed by the residential communities presented in this website. Information provided is deemed reliable but not guaranteed and should be independently verified.

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