California Senate Bill 458 CA SB 458 Forgives All Debt After a Short Sale


July 18, 2011: A new California law will further protect homeowners pursuing short sales by barring first and second lien holders from going after sellers for money owed after the short sales close.

Gov. Jerry Brown signed Senate Bill 458, authored by Senate Majority Leader Ellen Corbett (D-San Leandro,) into law on Friday. Full Text of the Bill here.

A short sale is a transaction in which the homeowner owes more on the loan than the property is worth. To sell the home, the lien holder or lien holders must approve the sale because the amount owed to the lien holder will be “short” of what is currently owed by the borrower.

The new law builds on the protections offered by a previous law, SB 931, which required the first lien holder in a short sale to accept an agreed-upon payment as the full payment for the outstanding loan…

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About Stout Law Firm

James Stout has practiced law in Orange County since 1995 and is highly regarded by the business community. He has passed three bar exams, California, Arizona and Nevada.
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