06/04/2010, California Association of Realtors
Victory for REALTORS® and Their Clients!
SB 1178 was just approved by the Senate, over lender opposition, with a vote of 30 to 4.
C.A.R. is sponsoring SB 1178 (Corbett) 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.
Real property: deficiency judgments.
SB 1178, as amended, Corbett. Real property: deficiency judgments.
Existing law provides that no deficiency judgment lies in any
event after a sale of real property or an estate for years for
failure of the purchaser to complete the contract of sale, or under a
mortgage or trust deed given to the vendor to secure payment of the
balance of the purchase price of real property, or under a mortgage
or trust deed on a dwelling, as specified, given to a lender to
secure repayment of a loan which was in fact used to pay all or part
of the purchase price of the dwelling.
This bill would provide that a loan used to pay all or part of the
purchase price of real property or an estate for years includes
subsequent loans, mortgages, or deeds of trust that refinance or
modify the original loan, but only to the extent that the subsequent
loan was used to pay debt incurred to acquire or construct
purchase the real property. The bill would
become operative on June 1, 2011, and would apply only to actions
filed after its operative date.