CA SB 931 Passes Senate – Bans Deficiencies on 1st Liens after Short Sales
August 25, 2010 by admin · Leave a Comment
The California Senate has passed SB 931 unopposed. SB 931 prohibits banks from pursuing deficiency judgements against sellers on 1st liens in California, regardless of whether the seller has refinanced or pulled cash out.
In California, once a seller has refinanced their mortgage, whether it is a cash out refinance or simply a refinance to a better interest rate, the loan becomes a “recourse loan”, meaning the bank can pursue the seller after the short sale for the deficiency, unless they state in writing that the debt is settled on the short sale approval.
SB 931 prevents banks from pursuing sellers on all first mortgages in CA.
The bill is now headed to Governor Schwarzenegger’s desk for his signature.
