Foreclosed Homeowners Who Refinanced Shielded From Lenders on Deficiencies

Homeowners and Realtors won a huge victory June 3rd when the California Senate overwhelming passed a new foreclosure protection bill despite heavy resistance from lenders. Until now, distressed owners who refinanced their original mortgage but lost their home to foreclosure anyway were liable for the difference between what they owed and what the home was sold for at auction. Such protection has been in place for homeowners who defaulted on their original  “purchase money” mortgage but, unknown to many, this was not the case for refi’s. Senate bill 1178 was originally defeated when it first came up for a vote, but due to the extensive efforts of the California Association of Realtors and over 5000 agents who voiced their support to congress, the bill was reintroduced and passed yesterday by a vote of 30 to 4. The National Association of Realtors is the largest trade organization in the world, and I for one am proud to be an active member. The next time someone criticizes congressional “lobbyists”, you might want to think twice about jumping on the band wagon and painting everyone with a broad tar brush! Hurray for the NAR and the California Senate. Chalk one up for the people!