Are short sales protected by CA civil codes in the same way as forclosures?


#1

I was just wondering if the “purchase money” protections offered by the CA civil codes, that state banks cannot pursue a deficiency judgement for non-recourse loans, applies to short sales as they do to foreclosures? With a short sale is it imperative to get the bank to state in writing that they agree to a full release from deficiency or is it not really necessary, due to these laws? Thanks in advance for your response :slight_smile:


#2

Hi Viginia,
Last year the state of CA passed 2 laws that state if the lender approves a short sale on a 1st or a 2nd lien position they are not allowed to pursue collection on any deficiency. This makes any short sale approval a full satisfaction release regardless of the language on the approval letter and regardless of whether or not the loan was a purchase money loan or not.


#3

That’s great news. Thank you very much for responding!