patrick.net

@fatguy

Interesting this SB458 -- so this law is actually retroactive. I think lenders of a second mortgage will hesitate more in allowing short sales, since their interest may be wiped out. Any other comments on this?

Banks may be more hesitant to start new litigation based on SB 458, but I'm sure they're just as interested as to whether it's retroactive or not. The only way to test that is in court, unless the legislature amends it one way or the other.

StoutFiles says

A lot of people got burned on that risk and now they don't want to own up for it.

I heard,now lots of responsible people who bought after 2004 can't refinance their mortgages.

fatguy says

California recently passed SB458, which prevents deficiency judgments on junior liens in a short sale.

Whether it's retroactive or not remains to be seen.

My short sale was in '08. If I'm sued, SB458 will be one of my defenses. If I lose, my only true recourse is Chapter 13 BK. I will fight the whole way.

Why would it be retroactive? Do you see any language in the law that suggests it would be?

The practical effect of SB458 is that second mortgagees and third mortgagees will just stop agreeing to short sales unless they get what they want (more money). This is not really a good law.

fatguy, did you take a cash-out refi?

bubblesitter says

I heard,now lots of responsible people who bought after 2004 can't refinance their mortgages.

They weren't *that* responsible -- they paid bubble prices voluntarily and bid up prices with stupid loans. How many people do you know that were truly responsible who can't pay their mortgage now? I've never seen one mentioned in a media article, despite the fact that sometimes the media refers to them as "victims."