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Prairie Oaks Neighborhood
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California Short Sale Law Changes For Second Loans
A new law went into affect July 15 of this year, SB 458, concerning short sales, and the junior loans (seconds, thirds) on those short sales. Since 2010, if a bank who had the first agreed to the short sale, they could not come after the seller after the closing for a deficiency judgement(SB 931). SB 458 is almost the same law, except for junior loans.
New California Short Sale Law
Typically, in a short sale with 2 loans, the first usually offers $1000-$3000 to the second to agree to the short sale. The second, unless there was settlement language that included that the loan was paid in full, and there would be no deficiency judgement, would reserve the right to come after the seller later for the remaining money owed. Sometimes they would require a seller to sign a promissory note for the difference of what they were getting and what was owed. The second loans are almost always the hardest part of a short sale. Most sellers will not agree to additional monies owed, when they won’t even own the home.
SB 458 now extends the law towards junior lien holders. If the junior lien approves the short sale, they can not come after the seller for a deficiency judgement or a promissory note.
Now before everyone gets all excited about this new law, in my opinion there are some possible side effects to this law. I think the banks that have junior liens, may just decide not to do short sales. If the home they have a second on, is foreclosed on, they can still go after the owner for the money owed. If they agree to the short sale, they get the $1000 – $3000 and that is it. If sellers are lucky, the first will decide it is worth it to offer more than they have in the past to the junior lien holders. It is too soon to see how the banks are going to react. I have heard of two short sale approvals that were approved, were pulled because of the new law.
Whether you are a buyer or a seller, if you are dealing with a short sale junior lien, I advise patience. This will probably slow down and stall the process for a while, during which time the banks will be deciding how to deal with the new law.
Open House This Sunday
I will be holding my newest listing open this weekend on July 24, from 2-4. The home, 328 Lone Spur Drive, here in Folsom features 3 bedrooms, 2 baths, and backs to a greenbelt.
Click here for more info and pictures.
Be sure and come by and say hi.
Open House Extravaganza – 3 Reasons To Come By
I will be holding open 1028 Berg Court, Folsom this Sunday from 1-4. Why should you stop by my open house this Sunday?
1. See a great 4/3 large home on a court
2. Enter a drawing to win a large screen HDTV
3. Help local area food banks
This weekend Lyon Real Estate is holding an Open House Extravaganza. Lyon open houses on Saturday and Sunday will be collecting can foods for the local area food banks. And for those who bring in canned goods, there is a drawing for a large screen HDTV! Winner will be announced next week.
Please stop by say hi, and if you can, bring some cans!
Are You A Buyer Looking For A Turnkey Folsom Home?
I have a new listing that will be coming on the market later this week. This single story home has 2375sqft, 4 bedrooms, 2.5 baths. Three car garage, rv parking. Over 1/3 acre lot with pool and spa. Lots of upgrades. It will be priced at $450,000. If you or someone you know might be looking for a home in Folsom like this, be sure and contact me.
1224 Souza Way – Open House – New Price
I will be holding 1224 Souza Way open today from 2pm to 4pm. This lovely single story home has 3 bedrooms, den and 2.5 baths. It has just been reduced to $420,000. Located in the lovely Parkway neighborhood. Be sure and stop by to see it. Click here for more info.
If you would like a private viewing of this home please contact me.
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