Good news for Palisades homeowners in trouble

There is a new California law that will protect homeowners while pursuing short sales by prohibiting first and secondary lien holders from going after sellers for money owed after the short sales close.

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

This new law, which became effective immediately, now prohibits secondary lien holders from pursuing deficiencies after a short sale closes.  By extending anti- deficiency protection to all existing loans on a home when a short sale occurs, homeowners are given the option to use a short sale as an alternative to foreclosure or bankruptcy.