Source: http://agiorealestate.com/index.php?page=54
Timestamp: 2017-08-22 14:43:04
Document Index: 466638233

Matched Legal Cases: ['§ 726', '§ 10026', '§ 2970', '§ 2945', '§ 2944', '§ 10085']

Understanding Short Sales - Agio Real Estate, Inc.
A It depends. California has "anti-deficiency statutes" that protect certain borrowers from deficiency judgments. A trustee's sale foreclosure does not involve the courts and does not permit the lender to go for a deficiency judgment. In order to be able to go for a deficiency judgment, the lender must use a judicial foreclosure (which involves a court proceeding).
A No. A lender cannot opt to sue on a debt secured by a mortgage or trust deed instead of foreclosing. This is called the "one action rule" or "one form of action rule." (Cal. Code Civ. Proc. § 726.) One exception to this rule is if the security for the loan has become "valueless" after the lender's security interest was recorded (e.g., this would be the case for a "wiped out" junior lien holder who now holds an unsecured note). In this case, the lender can sue directly on the debt (note) unless the borrower's loan falls into category (1) or (2) in Question 4.
Q 9. What language in the lender's "approval "letter lets the seller know that the seller in a short sale is relieved of any further debt obligations owed to the lender?
Q 10. What language in the lender's "approval "letter lets the seller know that the seller in a short sale is not relieved of any further debt obligations owed to the lender?
A Sample language in an "approval" letter might read as follows:
Q 11. So what have lenders been doing if their "approval" letter does not relieve the seller of any further debt obligations?
A No, unless certain requirements are met. An advance fee is a fee charged upfront for services not yet performed. An advance fee is broadly defined to include a fee claimed, demanded, charged, received, collected or contracted from a principal for negotiating real estate loans (Cal. Bus. & Prof. Code § 10026). Among other things, no less than ten calendar days before collecting an advance fee, a real estate broker must submit to the DRE the advance fee agreement and all other materials to be used for advertising, promoting, soliciting, or negotiating the advance fee (10 Cal. Code of Reg. § 2970). Furthermore, if a Notice of Default has been recorded against a property involving one-to-four owner occupied residential units, an advance fee is prohibited for foreclosure-related consulting services under the foreclosure consultant law (Cal. Civ. Code § 2945 et seq.). Note that advance fees are prohibited for loan modifications (Cal. Civ. Code § 2944.7, Cal. Bus. & Prof. Code § 10085.6).