It will amend California Civil Code 580e with regards to a short sale only. It does not apply to foreclosures. It also prohibits a lender from demanding a seller contribution as a condition of short sale approval. SB 458 applies to one to four-unit dwellings in California, but they don't have to be owner occupied.
I predict that banks will still ask for a contribution, though. Maybe they just won't put it in writing. They will probably try to break the law, because who will slap their hands? There are no short sale police. Plus, title companies will bear more liability.
More Articles by Elizabeth Weintraub:
- What You Need to Know About Short Sale Deficiency Judgments
- Do You Need a Lawyer to Do a Short Sale?
- Top 10 Short Sale FAQs
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At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.