One of the questions I get asked the most during a short sale consultation is “Can they come after me for the difference of what I owe them and what they get?”. Fresh off the press, here is a new CA law for 2011:
Starting January 1, 2011, a seller’s first trust deed lender cannot obtain a deficiency judgment against the seller after a short sale. Providing written consent to a short sale shall obligate the first trust deed lender to accept the sales proceeds as full payment and discharge of the remaining amount owed on the loan. This law applies to first trust deeds secured by one-to-four residential units, but does not limit the lender from seeking damages for fraud or waste by the borrower. Senate Bill 931. Governor Schwarzenegger vetoed Senate Bill 1178, our sponsored bill, which would have extended California’s anti-deficiency protection to refinance loans.
Be sure to always talk to an attorney to make sure there isn’t some stipulation for your situation!
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