The California Association of Realtors is sponsoring SB 1178. This legislation seeks to extend “anti-deficiency protections” to homeowners who have refinanced “purchase money” loans and are now facing foreclosure. Today the state senate passed this legislation by a vote of 30-4.
Generally speaking, a loan taken on a residential property at the time of purchase is subject to provisions that afford a homeowner protection against personal liability for the difference between the value of a foreclosed property, and the original amount owed on the mortgage to the lender.
A loan that is refinanced generally does not afford a homeowner the same protection,
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#1 by Marie on July 16, 2010 - 10:39 am
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So does SB 1178 apply to those buying a new home or just refinancing? Or would it apply to a new home buyer if they went into foreclosure in the future? I’m planning on moving to Palm Springs and I’m not a California resident now. I found a great real estate agent at Patrick Stewart Properties and I’m sure he’ll fill me in on all the details when I go out there to start house hunting, and dealing with the financial side of buying a house. It will be my first home purchase so I just want to be aware of anything that deals with mortgages, like a new law if SB 1178 gets signed.