NorCal Partners Real Estate

Rowland Fellows, Broker, CDPE, ePro, GREEN, CA BRE # 01435867

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Short Sale-Forclosure Rules for 2011

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The new year brings significant changes in California on how a short sale or a foreclosure affects homeowners!  California Senate Bill 931, which went into effect on January 1 2011, restricts the circumstances which lenders can pursue deficiency judgements against the borrower.  First deed of trust lenders can no longer pursue deficiency judgements after a short sale of 1-to-4 residential properties.  This is a big change!  Previously, the mortgage had to be “purchase money” and the home had to be owner-occupied in order to qualify for this exclusion.  Here’s is a table that summarizes the change:

IndustryCompanyFirst NameLast NameMobile PhoneOffice PhoneEmail
CPAAirola, CPA & AssociatesDavidAirola(916) 221-0109(916) 932-7110dga@airolacpas.com
Venture CapitalAkers CapitalRogerAkers(916) 715-7917rakers@akerscapital.com
Mortgage LoansGold Country Home LoansMikeArnold(916) 284-2588mike@GCHLoans.com
Law PracticePBE Law GroupSteveBeede(916) 966-2260sjbeede@bpelaw.com
Hair StylingCourtyard SalonBeckyBrucher(916) 531-5746rgb5581@yahoo.com
Residential MaintenancePioneer Cleaning ServicesErichBryant(916) 723-2820(530) 672-94962pioneer@comcast.net
ConstructionBanconn EnterpriseThomasConner(916) 420-3757(916) 648-2040tconner@alpine7.com
Real Estate ServicesPBF ServicesJenniferEstrella(916) 812-5444jennifer@pbfservices.com
Real EstateNorCal Partners Real EstateRowlandFellows(916) 792-2368(916) 987-1670rfellows@norcalpartners.com
Home InspectionHarmon Home InspectionsRobertHarmon(916) 799-3581rharmonhi@att.net
Residential SolarParamount SolarJimmyHodges(916) 412-3151(916) 746-8017jhodges@paramountsolar.com
InsuranceFarmers InsuranceBradMaryatt(916) 300-0808(916) 435-4269bmaryatt@farmersagent.com
Escrow & Title ServicesPlacer TitleKathiMcCrum(916) 966-8934kmccrum@placertitle.com
Residential FlooringGold River FlooringLindsaySamudio(916) 849-7782(916) 638-5563lsamudio@goldriverfloors.com
Financial Planning20/20 AdvisersLeonardSimpson(916) 284-5650(916) 987-8070leonard_simpson@comcast.net
Real EstateStreng RealtySteveStreng(916) 612-5157steve@strengrealty.com
Commercial LightingROC Solid LightingMikeWafer(916) 803-6512mike@mikewafer.com

Exceptions to these new rules are if the borrower defrauds the lender, or if the borrower damages or removes items from the property that would otherwise be transferred with the sale.

Another major change actually took place October 1 2010 and deals with Fannie Mae’s handling of borrowers who “strategically default” on their mortgages.  A strategic default occurs when a borrower can afford to make their mortgage payments, but chooses to let the property go to foreclosure instead.  The change deals with the amount of that the borrower has to wait before they can qualify for a new Fannie Mae-backed loan.

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Again the exceptions are if the borrower defrauds the lender, or if the borrower damages or removes items from the property that would otherwise be transferred with the sale.

This article is not intended to be legal advice.  If you have questions about your specific situation, you should consult with a real estate attorney.  If you would like a referral to one, I can help you with that.

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