Home > Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Temecula > California Short Sale Protection Tops New 2011 Real Estate Laws

California Short Sale Protection Tops New 2011 Real Estate Laws

THIS ARTICLE APPEARED IN SUNDAY’S RIVERSIDE PRESS-ENTERPRISE HOMESELLER SECTION

The New Year often brings fresh, unblemished optimism. This year, it also carries a sack full of new California real estate laws aimed at protecting the consumer.

The new laws that took effect last week target short sales, loan officers, fraud protection and tenants’ rights.

Short Sale Deficiencies Banned

Most prominent is Senate Bill 931, which makes it unlawful for a bank to pursue the unpaid balance of a first trust deed after a short sale. The new law, CA Civil Code 580e, will impact short sales closed on or after Jan. 1. It does not cover second trust deeds, but it does include any first trust deed on a residential structure of one to four units, regardless of whether the owner lives in the property.

This law was designed to stop lien holders from pursuing “deficiency” balances after a short sale for loans in which the homeowner had no liability after a foreclosure. California, which is a non-recourse state, prevents a bank from pursuing a deficiency judgment against a defaulted homeowner after a trustee’s sale foreclosure. A bank can only pursue the unpaid balance if it utilizes a judicial foreclosure, which can be a more timely and costly process, or in some cases if the loan is a line of credit.

Lawmakers had the right idea when they went to work on the new short sale bill last year. Because, however, the law does not cover second trust deeds, homeowners can still be at risk in a short sale and should seek qualified real estate brokers with a proven track record of success.

For more information on the details of this law, or for a free copy of the Brand-New Special Report, “9 Alternatives to Inland Empire Foreclosure,” call 1-800-941-1900, ext. 9003; or email PE@DreamBigRealEstate.com.

Mortgage Loan Originators

Loan officers now must have a Mortgage Loan Originators (MLO) license endorsement to arrange real estate financing, or face a fine of $20,000 and six months in prison. Real Estate brokers cannot hire or pay a licensee who does not have the MLO endorsement for any activities that would requirement the expanded license. Previously, anyone licensed by the California Department of Real Estate could represent buyers and sellers in a real estate transaction as well as handle the financing on that transaction. Licensees still can perform both functions, but the expanded licensing was designed to help ensure that loan originators have undergone at least rudimentary educational requirements. Senate Bill 1137 amends several sections of the CA Business and Professions and CA Finance codes.

Tenant Protections

As of Jan. 1, a notice to terminate a residential tenant who remains after a foreclosure sale must include a separate cover sheet that includes the tenant’s rights, including a 90-day termination period. Another provision of Senate Bill 1149 protects a residential tenant’s credit by generally prohibiting the court clerk from revealing unlawful detainer court records unless the plaintiff prevails at trial.

Meanwhile, CA Penal Code 602.9 doubles the penalty for those who fraudulently rent out a property to an unsuspecting tenant. As of Jan. 1, anyone who claims ownership or takes possession of someone else’s residential property for the purpose of renting or leasing it to another without the consent of the owner faces a fine of up to $2,500 and one year in county jail.

And Senate Bill 782 makes it illegal for a landlord to evict or fail to renew a tenancy for a victim of domestic violence when the alleged attacker is not a tenant of the same dwelling.

Foreclosure Filing Timeline

The existing timeline for a bank to schedule a trustee sale of a property has been altered. Beginning Jan. 1, a Notice of Trustee Sale can be filed as early as 85 days after the filing of a Notice of Default. The current law requires that the lien holder must wait at least three months after a Notice of Default before scheduling an auction. The new law, which Amends Sections 2924 and 2924c of the CA Civil Code, still requires that the sale date could not take place earlier than three months and 20 days after the Notice of Default.

Junk Mail

Assembly Bill 1373 targets the official-looking offers that yearly flood homeowners’ mailboxes offering copies of deed and title records for a fee. The new law requires any such mailed solicitation must include a prominent statutory disclosure that the copy service is not associated with any governmental agency and that the homeowner can obtain such records from the county recorder. Section 17537.10 is added to the Business and Professions Code.

Home Inspection Energy Audit

Beginning this year, a home inspection and inspection report may, upon a client’s request, include an audit of the energy efficiency of a home, according to the standards of the Home Energy Rating Systems (HERS). A new HERS booklet will be available to home buyers, according to CA Civil Code 2079.10.

Several other laws take effect next week. For details about those or any other California laws, visit www.leginfo.ca.gov.

(Brian Bean and Timothy Hardin are Realtors and Ambassadors for Helping A Million Homeowners, a nationwide organization that is committed to helping alleviate the financial stress that so many homeowners face today. They can be reached directly at Brian@DreamBigRealEstate.com.)

Brian Bean and Timothy Hardin
Real Estate Professionals
www.DreamBigRealEstate.com
www.IEShortSalePros.com
www.HelpingAMillionHomeowners.com

Short Sale Genius Elite

I’ve been specially trained to negotiate short sales with an emphasis on Deficiency Waivers

 

ACTIVE RAIN - Dream Big Real Estate and Inland Empire Short Sale Pros Blog Dream Big Real Estate and Inland Empire Short Sale Pros Blog FACEBOOK - Dream Big Real Estate and Inland Empire Short Sale Pros TWITTER - Dream Big Real Estate and Inland Empire Short Sale ProsLINKEDIN - Dream Big Real Estate and Inland Empire Short Sale ProsRSS FEED - Dream Big Real Estate and Inland Empire Short Sale Pros BlogSTUMBLE UPON - Dream Big Real Estate and Inland Empire Short Sale Pros SEND EMAIL to BRIAN BEAN @ Dream Big Real Estate and Inland Empire Short Sale Pros YAHOO PULSE - Dream Big Real Estate and Inland Empire Short Sale Pros GOOGLE BUZZ - Dream Big Real Estate and Inland Empire Short Sale ProsDIGG - Dream Big Real Estate and Inland Empire Short Sale Pros

If one advances confidently in the direction of his dreams,
and endeavors to live the life which he has imagined,
he will meet with a success unexpected in common hours.
 

 

Henry David Thoreau

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: