Deficiency Judgment In San Diego California

California anti deficiency law SB931 protects San Diego homeowners after a successful short sale on the 1st lien. The lender accepts the short sale proceeds as full satisfaction, discharging the remaining balance and cannot pursue you for future deficiency. Your loan does not have to be a purchase money loan and it even qualifies for hard money financing.

SB 931 does not apply to 2nd or 3rd mortgages or HELOC’s, however new CA law SB458 prohibits deficiency for junior liens after a short sale for primary residences of 1-4 units. Lenders can no longer require a borrower in San Diego to pay additional compensation in exchange for a short sale waiver of deficiency rights. However the new law does not prohibit a borrower from voluntarily offering a monetary contribution to a lender in hopes of obtaining a short sale approval. Exceptions to this include a lender seeking damages for a homeowner’s waste or fraud, a borrower that transferred ownership into the name of an LLC/corporation or took out the loan at time of origination in the form of an LLC/Corporation, a political subdivision of the state, a lien secured by a bond as specified, or a public utility lien. Additional rules apply if a note is cross-collateralized by more than 1 property.

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