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California Senate Bill 931 Bans Deficiency Judgments on First Liens

by Samia S. Morgan

Short sales (when the sale amount is less than the balance owed on the property’s loan) have become a popular option to avoid foreclosure proceedings, especially for home sellers in California. While it was thought to have a better credit outcome for the borrower, short sales in California have NOT been protected from lenders pursuing the original borrowers for the remaining loan balance – until now.

The California Senate has passed Senate Bill 931, without opposition. SB 931 prevents banks from pursuing sellers on ALL first mortgages, including short sale sellers. The bill protects sellers on all first liens, even if the seller has refinanced the loan or taken cash out. This basically nullifies California’s “recourse loan” statutes on short sales.

SB 931 has been passed to Governor Arnold Schwarzenegger’s desk for signature. It prohibits deficiency judgments on properties of 1 to 4 dwelling units, non owner or owner occupied. While some sellers have been able to get lender settlements without recourse, this bill eliminates the need to engage costly attorneys or mediators to make those negotiations.

SB 931 was sponsored by Denise Ducheny, a San Diego Democrat. The implications are huge – many sellers have been reluctant to go through with short sales, which are also time-consuming and complex, because they fear the recourse. With recourse out of the picture, both Realtors who specialize in short sales and their clients have reason to celebrate.

Since the bill went through unopposed, there is no reason to believe that the Governor will not sign 931.  Will other states follow?

 

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Avoiding Foreclosure

by Samia S. Morgan

Foreclosure can happen fast. Facing foreclosure is frightening, and many homeowners are just not aware of how fast a foreclosure can happen. I’ve heard some heartbreaking stories in the last few months. The foreclosure process is painfully personal and can be painfully fast. Do you realize you and your family can lose your most precious asset in just a few short months?

So what happens in a foreclosure--and when? The U.S. Department of Housing and Urban Development has prepared an easy-to-understand foreclosure timeline. Just to emphasize how pressing foreclosure can be and how quickly it can happen, I have indicated below the foreclosure process.

If you miss one payment. You get a call or note from your lender. Not so bad, right? You’re just juggling the bills a little right now--no problem. You’ll pay as soon as possible. Not to worry.

If you miss two payments. Your lender calls again. Where are the payments? You’re still trying to convince yourself that everything is OK, but you still can’t make the payment, either. Things have to get better, don’t they?

If you miss three payments. You get a scary “Demand Letter” or “Notice To Accelerate” from the bank that says you must pay all the missed payments in 30 days. If you don’t pay or negotiate different arrangements, the bank can start foreclosure.

If you miss four payments. If you still haven’t paid or made other arrangements within that 30 days, the lender turns you over to the legal team. But now you’re responsible for all the legal expenses, too.

Finally you will get notice that your home will be sold by the Sheriff--and you’re in foreclosure. But it’s only been just a few short months! You’re told you can save your home if you make all the missed payments and pay all the delinquency costs. But where will you get all that money, and why would the lender accept other arrangements now? It’s too late!

You may get one last chance to save your home. You can still keep your home even after the sale if you pay all the missed payments and all foreclosure costs. You must take action to save it.

Although foreclosure may differ by state, this gives you a good idea of how foreclosure works--and how fast it can happen. HUD notes that a housing counselor could have helped even after the fourth missed payment. Doing nothing if you’re facing foreclosure is the worst possible thing you can do.

Doing nothing is not an option if you want to save your home. HUD advises that you be honest with your lender as soon as you suspect you’re in trouble. You can also contact HUD to find a housing counselor who can help. You don’t have to face foreclosure alone.

Feel free to contact me if you have any questions about foreclosure. I am always avaialble to answer your real estate questions, even difficult ones like this.

Recycling Program- Get on Board

by Samia S. Morgan

Everyday we hear of new reports and statistics regarding climate change and global warming. These reports indicate how imperative it is that we all do our part to help preserve this fragile planet we live on. Not everyone knows what they can do, or how to start.

The easiest place to start would be at home. Listed below are few simple things that all homeowners can do to kick start a home recycling plan. Don't feel like you have to do everything at once, unless you want to, which would be great. Implementing a home recycling program  will change some of the current processes in your home, but it shouldn't take long to get use to these new ways of doing things and change your habits.

Curbside or Drop-off Recycling
According to Earth 911, curbside recycling is offered to half the U.S. population which provides homeowners a convenient way to recycle a variety of different materials such as, plastic, paper, aluminum cans, glass bottles and steel/tin cans . For those areas where curbside recycling is not offered, recycling drop-off locations are a fabulous alternative.

Stop Using Plastic Shopping Bags
Plastic bags are not biodegradable and are threatening our marine life and clogging our landfills. A simple step in your home recycling plan would be to stop using plastic shopping bags. There are so many alternative shopping bag sources out there now with many large, and small, stores offering canvas reusable bags for less than a dollar each.

Composting
Composting is a fabulous way to limit the amount of garbage in your garbage cans and ultimately the amount of garbage you add to our landfills. An added benefit of composting is the nutrient-rich fertilizer you will create for your gardens using organic  materials from your home.

For additional information visit Earth 911 or contact your local home waste collection service provider.

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Photo of Samia S. Morgan, Inc. Real Estate
Samia S. Morgan, Inc.
dba Samia Realty Group
BRE# 00967165
San Mateo CA 94403
650-678-3633