What’s New With Short Sales in 2011?
State Bill 931 Passed and Now Law
Costa Mesa Real Estate Short Sales
Costa Mesa real estate has been no different than anywhere else in the state and the country, we have seen our fair share. Short sales and distressed property have been tipping the scales between 35% and 45% of our Costa Mesa real estate inventory in the past two years.
What’s New With Short Sales in 2011?
A very important piece of legislation was passed through California at the end of last year. State Law 931 (or SB 931) requires a lender that has approved an agreed upon short sale payment to accept that amount as full payment for the outstanding balance of a loan secured by real property, prohibiting the lender from pursuing an additional deficiency judgment. The deficiency protections in this measure only apply to first liens, junior liens are not affected. If signed by the governor this week, SB 931 would go into effect on the first day of next year, January 1, 2011. The text of the bill does not specifically address whether it will be applied on a go forward basis, to short sales that occur after the effective date, or retroactively, to short sales that occurred prior to the effective date. The measure would certainly apply to those short sales that occur after the effective date of January 1, 2011 but it is unknown how or if short sales that have already closed would be affected.”
OK, that got pretty dry- that is from the California Association of Realtor’s website. How does it apply to you and your Costa Mesa home? If you are considering a short sale, any lender in a first lien position who agrees to the sale will not be allowed to come after you later for the amount due on the mortgage. That’s B-I-G BIG.
What are the nuances?
Important- Any second, third, etc. liens (think home equity lines of credit) are not in the same situation for your Costa Mesa real estate. They still have the right to come after you by giving you a 1099 at the end of the year or selling your debt off to a collection agency.
This is important stuff, so if you are considering a short sale in Costa Mesa, pleas consult an attorney and certainly a tax professional for how a short sale will effect your finances. The good news is that a short sale will hurt your credit a lot less than a foreclosure would.
If you need help with your Costa Mesa real estate, contact Colin Delaney at 714-743-9882 or Email.
What’s New With Short Sales in 2011
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