Valley Homeowners Can Now Get Rid of “Upside-Down” Homes and Wipe Out All Outstanding Mortgage Debts After Short Sale!

On July 15, 2011, Governor Jerry Brown signed a new law, SB 458, which wipes out outstanding loan balances on all mortgage loans when a California homeowner “short sells” their home.  This new law is a huge victory for homeowners who find themselves with mortgage debts that are bigger than the value of their home – typically referred to as being “upside-down”.  These “upside-down” homeowners’ previous attempts to short-sell their homes and unburden themselves from enormous weight of their mortgage debt was thwarted when lenders chose to pursue the homeowners for outstanding loan balances after the short sale transaction was completed.

 

A prior 2010 California law, SB 931, had attempted to address the situation, by prohibiting first mortgage lenders from pursuing homeowners who short sell their homes.  Unfortunately that law did not apply to junior lien holders, i.e. 2nd, 3rd, or 4th mortgages.  Thus, prior to July 15, 2011, a San Fernando Valley homeowner who sold their home in a short sale successfully got rid of the loan balance for the first mortgage only.  However, if that homeowner had a junior mortgage, such as a 2nd or 3rd mortgage, the junior lenders could still pursue the homeowner to collect the balance of the junior mortgages.  With the new California law, SB 458, effective on July 15, 2011, balances of all mortgages whether 1st, 2nd, 3rd or 4th are all wiped out and the mortgage lenders cannot collect against the homeowner after the short sale transaction is completed!

 

A short sale is a transaction which allows homeowners whose mortgage debt is more than their home is worth and they can no longer afford their homes, to sell their home at current market value.  By short selling the home, the homeowner disposes of the home and debt in a dignified manner and avoids the embarrassment and indignity of foreclosure.

 

Many San Fernando homeowners have utilized short sales to get rid of “upside down homes” and weighty mortgage debts especially during the last 3 years of declining property values.  As of August 2011, 69 of the 292 homes for sale in Woodland Hills are shorts sales; while only 20 homes are foreclosures – thus 24% of all active home sales in Woodland Hills are short sales.  14 of the 149 homes for sale in Calabasas are short sales; while only 6 homes are foreclosures – thus 9% of all active home sales in Calabasas are short sales.  41 of the 167 homes for sale in Tarzana are short sales; while only 10 homes are foreclosures – thus 25% of all active home sales in Tarzana are short sales.  43 of the 243 homes for sale in Encino are short sales; while only 14 homes are foreclosures – thus 18% of all active home sales in Encino are short sales.  47 of the 281 homes for sale in Sherman Oaks are short sales; while only 24 homes are foreclosures – thus 17% of all active home sales in Sherman Oaks are short sales.  And finally, 11 of the 179 homes for sale in Studio City are short sales; while only 7 homes are foreclosures – thus 6% of all active home sales in Studio City are short sales. 

 

With the new California law (SB 458) firmly in place as of July 15, San Fernando Valley homeowners may now utilize short sales transactions to get rid of their “upside-down” homes, weighty mortgages, while minimizing the negative impact on their credit profile, and shortening the recovery time to buy a new home in the future.  Typically a short sale home-seller can buy a new home within 2 years in contrast to the 7 year impact from a foreclosure.  The icing on the cake is the fact that your mortgage lenders cannot come after you for any portion of the debt after a short sale in California.  This is indeed good news!

 

Fast-Track Short-Sales are Available to Home-Sellers in Distress – APPLY HERE! CLICK HERE

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Best Home Deals in Studio City CLICK HERE
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Fast-Track Short-Sales are Available to Home-Sellers in Distress – APPLY HERE! CLICK HERE
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Bandele Oguntomilade is the broker and owner of Bogun Realty and Luxury Homes in Woodland Hills, California.  You may visit us at http://www.BogunRealtyAndLuxuryHomes.com or call 818-825-6996.

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