California Short Sale Law Bodes for Profitable 2012


As 2012 is well under way, negative economic news continues. You’re likely running into clients with their backs against the foreclosure wall. While the short sale has always been a viable option for some clients, in 2012, thanks to the new California short sale laws, it has become a whole lot more interesting. That’s good news for the real estate profession we well, and who couldn’t do with a dose of good news?

Two laws enacted this year in California – Senate Bill 931 and Senate Bill 458 which extends the protection offered by SB 931, favor the seller over the bank.

In the past, the homeowner in the short sale situation could still be pursued by the bank in the form of a deficiency judgment.

DEFINITION: Deficiency Judgment: A deficiency judgment is an unsecured money judgment against a borrower whose mortgage foreclosure sale did not produce sufficient funds to pay the underlying promissory note, or loan, in full.

Senate Bill 458 doesn’t allow the lender to pursue a deficiency judgment in California after they agree on a short sale and the short sale effectively closes. In effect, the law protects the seller from primary and junior liens. Lenders can no longer go after secondary liens if they agree to a short sale.*

In some cases, the homeowners might actually MAKE MONEY in the short sale process. This isn’t just the “cash for keys” money available in some foreclosure situations, but actual cash out of the sale.

California Association of Realtor’s President, Beth L. Peerce says – “The signing of this bill is a victory for California homeowners who have been forced to short sell their home only to find that the lender will pursue them after the short sale closes, and demand an additional payment to subsidize the difference,” She proceeded to say..“SB 458 brings closure and certainty to the short sale process and ensures that once a lender has agreed to accept a short sale payment on a property, all lienholders – those in first position and in junior positions – will consider the outstanding balance as paid in full and the homeowner will not be held responsible for any additional payments on the property.”

People facing foreclosure often don’t know where to turn or who to trust. The short sale does them a world of good. Educate your clients that a short sale allows them to keep their credit intact, enabling them to get back into home ownership more easily when they’re ready.

Potentially it offers them some money as some lenders are paying sellers to participate in the short sale – giving financially stressed sellers some cash they can use to move, or for anything else that’s pressing.

You’re aiming to serve your client AND you’re looking to close deals. The new California short sale law offers you the opportunity to close more business and provide a great service to your clients, offering them a way out their foreclosure nightmare.

We know a short sale is more work for you. That’s where we come in. Our job is building and maintaining the relationships that enable us to move easily and efficiently through the ‘red tape’ of the short sale process. This not only saves you time and stress, it means you’re more likely to actually get the short sale deal to go through.

We close 96% of the short sales that cross our desks. There are no upfront costs to you. If you have any questions about how to present the short sale option to your clients or how simple it is to work with us, let’s talk. You just may find that when we handle the short sale, you can focus on doing more of what you do best. Working with us, you’ll be liable to close more business. Need we say more?

*this does not constitute legal advice 

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San Diego CA, 92101
Phone: (888) 746-7820
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Short Sale Expert

Encore Real Estate Group
CA DRE Lic. #01883210

Broker: Troy Anthony Huerta
Agent: Leon Cook
CA DRE Lic: #01028204
CA DRE Lic: #01866021

925 B Street Suite 102
San Diego, CA 92101

Phone: 1-888-746-7820