SB 458 (California)

[Yeomah]

State (California)

We are in the process of completing a short sale. We have an 80/20 loan (1st and a 2nd/jr loan). Both loans have finally agreed to the terms of the short sale and we are set to close escrow on or before 8/19. My concern is: The second loan has drawn up a one page form that indicate the terms of the release. Basically they get a HUD and 9K from the first mortgage. At the very end of the document they placed a "deficiency acknowledgment" that basically states we have agreed to release the deed for 9k however, you will still be held responsible for the remainder of the loan.

I'm not sure they are aware of SB 458, which basically now makes it unlawful for them to seek a deficiency judgment once they agree to the short sale. I'm a little scared to bring it to their attention as they may pull the agreement and we end up in foreclosure... We have not signed the document yet but need to figure this out fast.. We wonder if we waive our rights under SB 458 if we go ahead and sign it..

Anyone facing this situation??

 

[Zigner]

State (California)

We are in the process of completing a short sale. We have an 80/20 loan (1st and a 2nd/jr loan). Both loans have finally agreed to the terms of the short sale and we are set to close escrow on or before 8/19. My concern is: The second loan has drawn up a one page form that indicate the terms of the release. Basically they get a HUD and 9K from the first mortgage. At the very end of the document they placed a "deficiency acknowledgment" that basically states we have agreed to release the deed for 9k however, you will still be held responsible for the remainder of the loan.

I'm not sure they are aware of SB 458, which basically now makes it unlawful for them to seek a deficiency judgment once they agree to the short sale. I'm a little scared to bring it to their attention as they may pull the agreement and we end up in foreclosure... We have not signed the document yet but need to figure this out fast.. We wonder if we waive our rights under SB 458 if we go ahead and sign it..

Anyone facing this situation??

Sounds to me like it's their way around things...you are contractually agreeing to pay the amount. This is a NEW contract. If you later fail to pay that amount, they will sue based on the new agreement, not the deficiency.