The California Association of Realtors is sponsoring SB 1178. This legislation seeks to extend "anti-deficiency protections" to homeowners who have refinanced "purchase money" loans and are now facing foreclosure. Today the state senate passed this legislation by a vote of 30-4.
Generally speaking, a loan taken on a residential property at the time of purchase is subject to provisions that afford a homeowner protection against personal liability for the difference between the value of a foreclosed property, and the original amount owed on the mortgage to the lender.
A loan that is refinanced generally does not afford a homeowner the same protection, and can be subject to "recourse" from their mortgage lender for the loss the lender suffers on that loan.
Still not law yet, but this was an important step...
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