Good News for Lake Tahoe Short Sales (California Side): New Law Protects Short Sale Hopefuls

by Joe Salcedo on 2:22 am

Lake Tahoe

The new law reportedly signed by Gov. Jerry Brown will prevent first and second lien-holders (financial institutions who hold the note of the house) from pursuing homeowners in California who have gone through a short sale.  It is a well known fact that first and second lien holders had the right to pursue home owners for 12 months to as long as 6 years after the short sale; which always seem to vary as new laws are signed.

“The new law 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.

The new law, which became effective immediately, now prohibits secondary lien holders from pursuing deficiencies after a short sale closes.”

(Note: I wrote a post about 2nd Lien Holders: I’ve got a bone to pick with you)

The California Association of Realtors embraced the signing of the law calling it a “victory for California homeowners.”

Californians, who many were forced to sell at a loss, will finally have final closure at the end of the process as the number one fear I hear from would-be short sellers is how the banks can go after them.  This is good news and I hope financial instutions abide by it.

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– Philip Duane Johncock

“I was laid off from the state in November of 2007 due to major budget cuts. We were no longer able to make our house payments as the job market was just beginning to get worse and worse. My agent in San Jose found Joe Salcedo in Reno for me and told me he has a lot of experience in short sales. He priced our home at a very realistic price in relation to the market values at the time. Joe was very professional and before we knew it we had an offer on our home. In September of 2008 our home closed and the bank forgave the difference. A short sale comes off of your credit in a much, much shorter time than a bank foreclosure. We will be forever grateful for the assistance of Joe Salcedo”

– James and Marsha McGinnis (feel free to call for a reference, Joe has my number)

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