LAW AGAINST SHORT SALE DEFICIENCIES EXPANDED

LAW AGAINST SHORT SALE DEFICIENCIES EXPANDED

In a major victory for REALTORS®, Governor Brown signed into law today a C.A.R.-sponsored bill, Senate Bill 458, prohibiting a deficiency after a short sale for one-to-four residential units, regardless of whether the lender is a senior or junior lienholder.  Effective immediately for transactions closing escrow from this day forward, both senior and junior lienholders cannot require a borrower to owe or pay for a deficiency in a short sale.  This law also prohibits any deficiency judgment to be requested or rendered for senior or junior liens after a short sale of one-to-four residential units.  Any purported waiver of this rule shall be void and against public policy.

Although a lender cannot require a borrower to pay any additional compensation in exchange for a short sale approval, the new law does not prohibit a borrower from voluntarily offering a monetary contribution to a lender in hopes of obtaining a short sale.  A lender is also permitted under the new law to negotiate for a contribution from someone other than the borrower, such as other lenders, agents, relatives, and the like.

Exceptions to the new law include a lender seeking damages for a borrower’s fraud or waste; a borrower that is a corporation, LLC, limited partnership, or political subdivision of the state; a lien secured by a bond as specified; a public utility lien; and additional rules apply if a note is cross-collateralized by more than one property.

This law is fully set forth as Senate Bill 458 (Corbett) at www.leginfo.ca.gov.

FTC WILL NOT ENFORCE MARS AGAINST REALTORS®

As another major victory for REALTORS®, the Federal Trade Commission (FTC) announced today that it will generally not enforce the Mortgage Assistance Relief Services (MARS) Rule against real estate brokers and agents engaged in short sales.  Real estate professionals must nevertheless comply with MARS prohibitions against misrepresentations and other laws prohibiting unfair and deceptive acts.  Also, FTC’s forbearance of enforcement is limited to real estate licensees in good standing and acting in compliance with state laws, who assist consumers in negotiating, obtaining, or arranging short sales in the course of securing the sale of the consumer’s home.

In its announcement today, the FTC acknowledged “it is especially important that the Rule not inadvertently discourage real estate professionals from helping consumers” with short sales.  The FTC will, however, continue to enforce the MARS Rule as to all other providers of mortgage assistance relief services, and also as against real estate professionals doing loan modifications or other types of mortgage assistance relief services.

Next week, on July 21, 2011, the FTC’s rulemaking authority for MARS will be transferred to the new Consumer Financial Protection Bureau (CFPB), but the FTC will continue to enforce the Rule.  The CFPB will have the authority to determine whether to change the MARS Rule as it applies to real estate professionals conducting short sales.

The FTC’s News Release is available at http://www.ftc.gov/opa/2011/07/mars.shtm.

Senate Bill 458, passed by California's legislature as an urgency statute with an immediate effective date, limits lenders' demands in connection with short sales.   It effectively treats a short sale to which a lender consents as if it is a non-judicial foreclosure sale.  This is significant because, under California law, a lender may not obtain a deficiency following a non-judicial foreclosure sale. 

SB 458 follows Senate Bill 931, which was passed in 2010.  SB 931 added Section 580e to California's Code of Civil Procedure.  SB 931 provided that "[no] judgment shall be rendered for any deficiency under a note secured by a first deed of trust or first mortgage for a dwelling of not more than four units."  SB 458 expands on SB 931 by prohibiting the holder of a residential mortgage loan from requiring the borrower to pay any additional compensation, aside from the proceeds of the sale, in exchange for the lender's written consent to the sale.  In short, it appears a lender who agrees to a short sale may not require the borrower to either (a) pay additional sums beyond the proceeds of the short sale, or (b) sign a short sale note.   

SB 458 also amends Section 580e to exclude many commercial transactions, such as where the trustor is a corporation, limited liability company or limited partnership. 

JJ - K&L Gates

What a great time to purchase a home!!! Why, you ask?...what about the terrible economy?...what about job loss in the Valley?...what about fear for the market prices going down again???YIKES!!!

Well, prices are at such a low we can hardly believe it ourselves. When, in recent memory, have you been able to buy a newer 3000 square foot home for less than $200,000? And never have interest rates been this low...as in never!!! When amortized loans we're "invented" the interest rates were at 5%!

So, what's holding you back? Foreclosure or short sale in your recent past?
Did you know after 3 years following either of these events you can repurchase as a first time homebuyer on an FHA,VA, or USDA loan as long as you qualify with a minimum 620 FICO score and your rations are in line. That's amazing, isn't it? Those of you who lost homes or short sold in 2008 can buy this year! How lucky can you get???

Were you investors aware that there is a loan program that allows you to purchase investment properties with only 10% down? And, it's government insured and fixed rates. Those of you wishing you could purchase income properties now while prices and rates are so low..you can!!!!

I am holding a homebuyer's seminar this Saturday, June 18 at 1 PM in Manteca. There we will have Lisa Johnson, my favorite lender, Bill Ames, a credit repair guy ready to help you qualify soon to purchase with specific cures to bad or low credit scores, another Spanish speaking lender we have worked with for years, free credit reports, free consultations!

IT'S ALL FREE!!!

ARENT YOU SICK OF PEOPLE TELLING YOU NO?

WE PRIDE OURSELVES ON...YES~!~!

Call me now to register or go to the website. See you there!!

Saturday June 18, 2011 1 pm, Manteca

6.38 Million late on their mortgage in April

Tuesday, May 17th, 2011, 5:42 taken from http://www.housingwire.com/2011/05/17/missed-payments-on-mortgages-jump-to-6-4-million-in-april

Mortgages 30 or more days delinquent or in foreclosure totaled 6.38 million in April, a 2.3% increase from the previous month, according to Lender Processing Services (LPS: 28.59 +0.42%).
The LPS "first look" monthly mortgage performance report showed a sudden increase in troubled loans in April after an 11% monthly drop in March. However, delinquencies are still 16.3% below levels seen one year ago. Overall, 7.97% of all loans in the LPS database are 30 or more days delinquent.
Of the 6.38 million properties in 30-day delinquency or worse, 4.2 million are not in foreclosure. There are also 1.9 million loans 90 days or more delinquent but not in foreclosure.
These mortgages are the exact ones making up the shadow inventory of foreclosures that are keeping downward pressure on home prices and stalling out a recovery. According to another data provider, CoreLogic (CLGX: 18.34 +0.22%), the shadow inventory has declined slightly over the past year.
CoreLogic defines the shadow inventory as mortgages in at least 90-day delinquency and currently transitioning from foreclosure to REO. This supply of properties currently not on MLS systems but winding through the foreclosure process fell to 1.8 million in January 2011, down from 2 million the year before.
But this inventory will continue to see incoming loans for some time.
"In addition to the current shadow supply, there are nearly 2 million nondelinquent or current negative equity loans that are more than 50% upside down that will likely become shadow supply in the near future," CoreLogic said. end article

My assessment:
You know, in America we don't have debtors prison as in the old days of Merrie Olde England, however, there are 6.3 million people being incarcerated in their homes per this article. Are you one of them? Do you know what your options may be?
According to NAR, out of the millions of foreclosures since 2005, over 50% were never listed for sale with a Realtor. People walked away not knowing their options or the consequences of their actions, which in many cases were dire. There is no reason to make uneducated decisions because of fear or embarrassment. Decisions that may have long term negative effects on your family, your credit and security and peace of mind. Information is at your fingertips. Numerous sources are waiting to help you. I am one of those. Let's talk. I can help!