New Short Sale Law

Posted on July 19th, 2011 in Market Conditions, Short Selling/Buying.

Banks Can’t Double Down On Homeowners Anymore in CA b

One of the most important things my clients’ attorney needs to make sure we get in a short sale closing is a properly worded release letter from the Sellers’ lender saying that non pursuit of any deficiency is agreed and that the deficiency will be written off W9’d to the seller.
Once a bank W 9 ‘s the loss it’s tax fraud to try to pursue you… So you want them to decide to write of the loss.

Unless you have a lawyer and Realtor watch your deal like a hawk for a proper release letter you may end up closing a short sale and still be pursued for a deficiency.

Closure and certainty to the short sale process is important for your sanity.

Well in the Golden state they agreed to put this into law so it is standard practice.
Again:
In Illinois when you do a short sale you have to get a release letter from the lender to promise that they will not pursue you for your deficiency.

In California it is now law that you can’t pursue letter or not.

This is one of the reasons you don’t want the part time realtor learning on your file. Most Realtors have not personally negotiated a short sale file.

In Florida many Realtors are being sued for improperly handled files because consumers didn’t understand the consequences of a short sale.

I make sure all my clients understand this issue if getting a full release and we fight hard for it.

I am an advocate for having full releases be implicit within every short sale that occurs In IL- and I have written my legislators and our associations to advocate for such a law.

Since California just passed such a law why can’t we–and quick.

Gov. Jerry Brown signed SB 458 which requires all lenders that agree to a short as payment in full of the outstanding balance of all first and secondary loans.

California already enacted SB 931 which forced first lein holders to absolve borrowers of any debt deficiency not covered by the short sale price ad this now takes are if junior leon holders.

Realtor’s lobbied for this law – it is a big step forward for the state’s distressed property market. Well, now I am lobbying my association and John Cullerton and Lisa Madigan to get a similar law passed here.

I you agree please email the following legislators :

ILLINOIS SENATE PRESIDENT
John Cullerton

4237 N Lincoln Ave
Chicago, IL 60618 or

160 N LaSalle Ste. 720
Chicago, IL 60601
773-883-0770
312-814-2079
http://www.senatorcullerton.com

GoTo Lisa Madigans website and post a request :
http://www.illinoisattorneygeneral.gov/about/email_ag.jsp