At the beginning of this year, Senate Bill 931, which stated that lenders who have agreed to a short sale would not have the ability to obtain a deficiency judgment against the seller after theshort sale was completed. The law applied only to first mortgage loans secured by one to four residential units.
Effective immediately, Senate Bill 458, will extend the same protection to any secondary or junior loans involved in the transaction. This means, after agreeing to the terms of the short sale, secondary or junior lien holders no longer have the right to pursue a deficiency judgment and the seller will no longer be required to owe or pay for a deficiency in a short sale.
To read more details about SB 458, click the “Short Sale” house button below: