Anti-Deficiency Protection Almost There: On Thursday, August 19, the California Senate approved SB1178. This bill extends anti-deficiency protections to homeowners who refinanced their mortgages, but didn't take any cash out, and are now facing foreclosure.
According to C.A.R. under existing law, if a homeowner defaults on a mortgage used to purchase a home, the home owner's liability on the mortgage is limited to the property itself. However, homeowners who refinanced the original purchase debt, even if only to obtain a lower interest rate, were not extended the same protections. C.A.R. sponsored SB 1178 to close this loophole and extend foreclosure protections to consumers who refinance their home loans but don't take cash out as part of the refinance.
SB 1178 still must be signed by Governor Schwarzenegger
Extracted from Bay East Government Weekly Report
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