SB 458 (Corbett) was signed into law by Governor Jerry Brown. The SB 458 law extends the protections of SB 931 (2010), to ensure that any lender that agrees to a short sale must accept the agreed upon short sale payment as payment as payment in full of the outstanding balance of all loans.
SB 931 of 2010, a previous law where a first mortgage holder could accept an agreed-upon short sale payment as full payment for the outstanding balance of the loan, but unfortunately, the rule did not apply to junior lien holders. The new SB 458 law extends the protection of SB 931 to junior liens.
The signing of this bill is a success and victory for all California homeowners who have been left with no option but to short sell their home only to find that the lender will pursue them after the short sale closes, and require an additional payment to subsidize the difference. The success of this new law (SB 458) brings closure and assurance to the short sale process and ensures that once a lender has agreed to accept a short sale payment on a property, all lien holders- those in first position and in junior positions- will consider the outstanding balance as paid in full and the homeowner will not be held responsible for any additional payments on the property.
The Law SB 458 contains an urgency clause which makes it effective upon signing.
If you're facing foreclosure, call our experts at California Home Assistance (800) 910-2818