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Coming in 2011, no more deficiency judgments for CA homeowners on 1st loans

Scott Fuller : October 5, 2010 9:00 am : Blog, Short Sale Articles

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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Bank of America Short Sale “Deficiency Evaluation Tool”

Scott Fuller : September 6, 2010 4:28 pm : Blog, Short Sale Articles

The “Deficiency Evaluation Tool”, or DET. Wow that has a high-tech ring to it doesn’t it? Sounds pretty important. Turns out it could be. From what insider sources have told me, this is what Bank of America is using to determine whether their short sale approval letter will have any “deficiency” language in it. What’s that mean, you ask? Well, if a bank approves your short sale, on the approval letter they reserve the right to include verbiage that allows them to come back at a later point and ask for money from the you, the seller. How likely is that to happen? Hard to say, but you can see below what the criteria is for this and what factors are likely to sway them in one direction or another. Things such as was it owner occupied, who is the investor, was it purchase money loan, etc. Well, the good thing about living in California besides the weather is the California Civil Code of Procedure, Sections 580a through 580d, which state that under certain situations, California is an “Anti-Deficiency” State. But, you have to meet certain criteria, such as it must be owner-occupied, must be purchase money loan, and more. We always suggest talking to an attorney before pursuing a short sale, and then you can again consult with your attorney about the specific verbiage included in your Bank of America or other lender’s short sale approval letter. Since short sale approval letters vary from investor to investor, we don’t if deficiency language will be included until the bank has reviewed the seller’s short sale package, but keep in mind you always have the opportunity to review the letter before you agree to accept their terms.

Bank of America Short Sale Deficiency

Bank of America Short Sale Deficiency Tool


Short Sale Statistics for Contra Costa and Alameda Counties Sept. 15th, 2010

Scott Fuller : August 24, 2010 8:33 am : Blog, Short Sale Articles

The year over year numbers are in for September for Short Sale and REO transactions in Contra Costa and Alameda Counties. As has been typical for the last few years the hardest hit areas are mostly in outlying areas of Eastern Contra Costa County, and areas where subprime loans were highly concentrated. 

The following cities had more than 30% of their total sales sold as Short sales:
Antioch, Bay Point, Brentwood, Concord, Discovery Bay, Hayward, Hercules, Livermore, Newark, Oakley, Pacheco, Pinole, Pittsburg, Richmond, Rodeo, San Leandro, San Lorenzo, San Pablo, and Union City. Most of these cities have had a continued increase in NODs (notice of defaults) and thus an increase in short sales.

Areas that are less impacted by NODs and thus have lower short sale numbers are: 
Alamo, Albany, Berkeley, Piedmont, and Sunol with less than 10% of sales being short sales. Most of these areas are more established and generally have higher incomes. This isn’t to say this trend will continue, it is possible that as many of these higher loan amounts become variable, NODs could rise in these areas over the next year.

Collectively in Contra Costa and Alameda Counties the number of properties sold as Short Sales are slightly over 30%.  What this means for home buyers is an opportunity to buy a short sale home at a great discount if you are willing to wait it out.

Here is the full report: Short Sale Statistics for Contra Costa and Alameda Counties Sept 2010 (best way to view is print out and lay side by side)

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Questions To Ask When Hiring An Agent To List Your Home as a Short Sale

Scott Fuller : August 19, 2010 7:31 am : Blog, Short Sale Articles

So you have decided that a short sale is right for you. Next step, hire the right agent for the job. Here are some tips on what you must ask to ensure you are hiring the agent…

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Putting off Short Selling Your Home? Your Bank May Beat You To It

Scott Fuller : August 11, 2010 4:02 pm : Blog, Short Sale Articles

Banks used to almost always stall the foreclosure process when they had accepted an offer to purchase and the short sale package. This is not always the case anymore…

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City of Brentwood Chooses a Foreclosure over a Short Sale

Scott Fuller : August 10, 2010 4:20 pm : Blog, Short Sale Articles

I have 2 short sale listings with cash buyers who are ready to close. City of Brentwood won’t lift the deed restrictions and is about to foreclose instead of accept the sale…

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What Can Happen When a Temporary Loan Mod Fails

Scott Fuller : August 10, 2010 3:47 pm : Blog, Short Sale Articles

Beware of potential “sticker shock” if your permanent loan mod fails. Make sure you know if you your payment is permanent or temporary…

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What the Media’s “Median Home Price Increase” Really Means

Scott Fuller : August 10, 2010 12:42 pm : Blog, Short Sale Articles

The media says the “Median Home Price” rose year over year, how come we never saw prices increase during that time, and what does it all mean?

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