Friday, July 22, 2011

More protection for Short Sale property Owners

New law gives added protection to short-sale hopefuls
On Friday, Gov. Jerry Brown signed Senate Bill 458 (Corbett) into law. The new law, which contained an urgency clause and became effective upon signing, protects homeowners pursuing short sales by barring first and secondary lien holders from going after sellers for money owed after the short sales close.

•A short sale – a transaction in which the homeowner sells the property for less than is owed on the mortgage – must be approved by the lien holder or lien holders, if there is more than one.

•Under previous law (SB 931 of 2010), a first mortgage holder could accept an agreed-upon short-sale payment as full payment for the outstanding balance of the loan, but the rule did not apply to junior lien holders. SB 458 extends the protections of SB 931 to junior liens.

•The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) sponsored the bill and urged lawmakers to pass this much-needed legislation.

•“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 C.A.R. President Beth L. Peerce. “SB 458 brings closure and certainty to the short-sale process and ensures that once a lender has agreed to accept a short-sale payment on a property, all lienholders – those in first position and in junior positions – will consider the outstanding balance as paid in full, and the homeowner will not be held responsible for any additional payments on the property.”

Read the full story: http://www.signonsandiego.com/news/2011/jul/18/new-law-gives-further-protections-short-sale-hopef/

Credit San Diego Union-Tribune for story and as always - Keep the faith!

Saturday, July 16, 2011

LAW AGAINST SHORT SALE DEFICIENCIES EXPANDED

In a major victory for REALTORS®, Governor Brown signed into law today a C.A.R.-sponsored bill, Senate Bill 458, prohibiting a deficiency after a short sale for one-to-four residential units, regardless of whether the lender is a senior or junior lienholder. Effective immediately for transactions closing escrow from this day forward, both senior and junior lienholders cannot require a borrower to owe or pay for a deficiency in a short sale. This law also prohibits any deficiency judgment to be requested or rendered for senior or junior liens after a short sale of one-to-four residential units. Any purported waiver of this rule shall be void and against public policy.

Although a lender cannot require a borrower to pay any additional compensation in exchange for a short sale approval, the new law does not prohibit a borrower from voluntarily offering a monetary contribution to a lender in hopes of obtaining a short sale. A lender is also permitted under the new law to negotiate for a contribution from someone other than the borrower, such as other lenders, agents, relatives, and the like.

Exceptions to the new law include a lender seeking damages for a borrower’s fraud or waste; a borrower that is a corporation, LLC, limited partnership, or political subdivision of the state; a lien secured by a bond as specified; a public utility lien; and additional rules apply if a note is cross-collateralized by more than one property.

Thursday, July 7, 2011

Got an FHA loan on your house and lost your job? Now hear this ....

FHA gives jobless homeowners one-year break
Beginning Aug. 1, the Federal Housing Administration will extend the period for unemployed homeowners to miss mortgage payments from four months to a full year, providing qualified homeowners with more time to find employment before the foreclosure process begins.

Making sense of the story

•The new Special Forbearance program falls under the FHA’s Loss Mitigation program, which FHA-approved servicers must participate in.


•The extended grace period only applies to FHA-backed loans and homeowners in the government’s foreclosure prevention program, the Making Home Affordable Program (MHA).


•In addition to extending the forbearance period and removing the up-front hurdles for borrowers, the FHA also reemphasized its requirement that participating servicers conduct a review at the end of the forbearance period to evaluate the borrower for all additional, applicable foreclosure assistance programs and notify the borrower in writing whether or not he/she qualifies for any other available option.


•If the borrower does not qualify for any foreclosure assistance option, the servicer must provide the borrower with the reason for denial and allow the borrower at least seven calendar days to submit additional information that may impact the servicer’s evaluation.


•Housing and Urban Development, which oversees FHA, hopes private lenders and government-controlled Fannie Mae and Freddie Mac will adopt a similar policy.


Read the full story here:
http://www.msnbc.msn.com/id/43673643/ns/business-personal_finance/ and

•For additional information on the program, including eligibility and requirements, please visit www.makinghomeaffordable.gov.