SB1178 Passes the Senate – Will It Protect More Homeowners from Deficiency Judgments?
The California Association of Realtors (CAR) sponsored SB 1178 which would give homeowners who have refinanced their homes the same non-recourse protections as those who never refinance their homes.
When a loan is non-recourse, the lender can only go after the home if the mortgage defaults. It cannot go afte the borroewr personally. However, this is only true if the loan hasn’t been refinanced.
SB1178 is designed to give the same protections to homeowners who refinanced to get a better interest rate or better terms on their loans.
SB1178 passed the state senate and now must pass the assembly and be signed by the Governor before it can become law.
If this passes, it will give more protection to homeowenrs who are losing their homes to foreclosure in the current economy.
Will this result in more defaults? Only time will tell.
For more information on short sales and strategic defaults please see:
If you would like a free consultation about your situation, please contact Christine Donovan at 714.319.9751.
I am not a CPA nor an accountant. This information should not be taken as legal or tax advice. Please consult your account for additional questions.