BILL SB1178 PASSES SENATE
SB1178 was just approved by the Senate, over Lender opposition, with a vote of 30 to 4. C.A.R. is sponsoring SB1178 to extend anti-deficiency protections to homeowners who have refinanced "purchase money" loans and are now facing foreclosure. Most homeowners didn't even know that when they refinanced they lost their legal protections, and now may be personally liable for the difference between the value of the foreclosed property and the amount owed to the Lender.
Check out the details on the C.AR. website.
Deborah A. Stone, Realtor Integrity-Solutions-Results-
Hogue and Belong Realty-Bankers Hill
San Diego, CA
"Representing clients with the experience of an investor"
Deborah this is very good news. Very good news.
Deborah - I think this is great news and the fact that this protection didn't carry over when a home owner refinanced for a lower rate and term in absurd. However if the homeowner did a cash out refinance then I do not believe they should have the same protection because they are no longer a victim of circumstance. They chose to use their home as an ATM machine so if they default they should have some liability. problem is determining what would be construed as fair. Great blog!
This is really important news to spread to homeowners who may be facing foreclosure. Great idea for a blog post!
Hey Deborah, I was going to comment earlier, but I had to get the real scoop from my mortgage guru, Nevin, before I did (see comment #2) . Since he's licensed in more states than I can even name, (CA included) I knew he'd know! And now I do too. Thank you for enlightening me!
Anna- Thanks for stopping by my blog. It indeed is great news.
Nevin- I don't know if I am in 100% agreement with the "cash out" refinance as an ATM machine. I get your point, but the cash may have been used to make the home inhabitable, or some other necessity. Wouldn't that be tough to legislate? I think you are right--what is fair would be hard to ascertain.
Melissa- Great news is right. I always thought this "refinance" law was a sham, and too many people were duped in that they didn't know they had to forego their rights.
Craig-Thnaks for your comment and let's all stay tuned for some more good news! I always thought the "deficiency judgment" was a "kick in the pants" on an ethical level AND would do absolutely zero to help the economy get back on its feet.
I think the Lenders are probably fighting this one tooth and nail. Boo-Hoo.
The final question is, "What will our Governator do for a bill that obviously costs the State some money when it's already running a $20 billion deficit?" After all, he can do anything since he's not running for re-election.