Skip to main content

NO NEW 21-DAY TURNAROUND REQUIREMENT FOR SHORT SALE APPROVALS


NO NEW 21-DAY TURNAROUND REQUIREMENT FOR SHORT SALE APPROVALS

Recently enacted Senate Bill 306 does not require lenders to review short sale requests from sellers and their agents within 21 days. The new California law, which addresses certain escrow procedures, has been mischaracterized by some practitioners as landmark legislation calling for a 21-day turnaround for short sale approvals.

The new law inserts a short payoff amount request into the existing payoff demand law which generally requires a lender to respond to a request for a payoff demand statement within 21 days from when it is requested, typically by escrow. The new law essentially requires, after a short sale has already been approved, for the lender to respond to a request for a short-pay demand statement within 21 days. The lender’s response to escrow can be a short-pay demand statement or even, depending on the circumstances, a written statement electing not to proceed with the proposed transaction.

Another provision of SB 306 may also cause confusion. In practice, a lender may approve a short sale subject to its review of a closing statement prepared by escrow, but the lender does not review that closing statement promptly. Under the new law, if a lender fails to approve the closing statement within four days, the closing statement shall be deemed approved, but only if it is "not clearly contrary to the terms of the short-pay agreement or the short-pay demand statement provided to the escrowholder." The new law does not bind a lender to a short payoff amount in an offer that the lender has not approved.

Senate Bill 306 contains other technical changes in real estate related laws, such as, but not limited to, the following:

  • Expanding the existing requirement for a lender to contact certain borrowers to explore options for avoiding foreclosure at least 30 days before filing a notice of default, to include not only owner-occupied residences, but also owner-occupied residential property with two-to-four dwelling units.
  • Extending the existing requirement for a lender to record a notice of sale from 14 to 20 days before a trustee's sale. This provision does not change existing law requiring a lender to wait at least 20 days after mailing a notice of sale before conducting a trustee's sale.

This new law comes into effect on January 1, 2010. The full text of Senate Bill 306 is available at http://www.leginfo.ca.gov/pub/09-10/bill/sen/sb_0301-0350/sb_306_bill_20090806_chaptered.pdf.

If your considering a short sale please let me know and I will review all of your options that you have and also advise you as to how this law change will effect borrowers who are struggling to make their payments.



Comments

Post a Comment

Popular posts from this blog

Low home loan rates create more affordable housing.

HOME LOAN RATES REMAIN LOWER:    NOW MAY BE THE PERFECT TIME TO SEE HOW MUCH YOU CAN SAVE ON YOUR NEXT MOVE.  HAVE YOU BEEN CONSIDERING DOWNSIZING, UP-SCALING,  MOVING TO A BETTER NEIGHBORHOOD OR SCHOOL DISTRICT?   IF YOUR CURRENTLY RENTING THIS IS ALMOST A NO BRAINIER, WHEN YOU COMPARE YOUR RENT TO YOUR INVESTMENT IN OWN HOME.    TODAY'S  CONFORMING LOANS TO 417K OFFER THE FOLLOWING: 5/1 ARM: 3.25%with zero points 10 Year Fixed: 3.375% with zero points 15 Year Fixed: 4% with zero points 30 Year Fixed: 4.75% with zero points. JUMBO TO 729K 5/1 ARM: 3.5% with zero points 10 Year Fixed: 3.875% with zero points 15 Year Fixed: 4% with zero points 30 Year Fixed: 4.75% with zero points out-of-pocket cost is for the appraisal. SUPER JUMBO TO 1.5MM 5/1 ARM: 4% with 1/2 point 30 Year Fixed: 4.75% with 1/2 point    Special attention to consider the 30 year fixed rate on Super Jumbo. This rate has never been...
Post a Comment
Read more

MOLD!!!!

The word "mold"has become a household name. It seems that there is so much information out there about health and air quality in our immediate environment stems back to "mold". It is as big an issue as the dreaded Termite problem. This is now so big that even home insurance companies may not issue new home owners coverage until they come to photograph key locations in your home to ensure that you do not have existing "mold". Insurance companies can go so far, as excluding coverage for any pre existing mold in your house. So what is the big issue with "mold" and why are we so cautious today? Well, recent studies show how sick it can make you and your loved ones in the home. It may well be the source of many allergies, and many other problems that we had not even noticed in the past years. Sometimes "mold" can be very obvious, and sometimes not If you are living in an old home, as many are in the US then chances are you may have mold in s...
Post a Comment
Read more

Santa Clarita 2010 Concerts in the Park Lineup Promises a Rockin' Good Time

Santa Clarita CA:  2010 Concerts in the Park Lineup Promises a Rockin' Good Time The City of Santa Clarita’s Concerts in the Park series is one of the most popular summertime traditions year after year. The free annual concert series begins July 10th and runs through August 28 th , with all shows starting Saturdays at 7:00 PM at Central Park. The 2010 series will kick off on July 10 with a performance by Incendio . Famous for their invigorating live shows and four critically acclaimed albums, the band showcases an infectious world fusion and Latin guitar sound sure to bring even the most reserved concert attendees to their feet. “ Concerts in the Park is one of the City’s most celebrated summer traditions and the City is proud to once again present the popular event at no cost to attendees,” said Mayor Laurene Weste. “Community members are encouraged to bring lawn chairs, blankets and the entire family to enjoy fantastic performances all summe...
Post a Comment
Read more