Last week the California Senate approved SB 1178, extending anti-deficiency protection to homeowners who refinanced their original mortgage loans and are now facing foreclosure.
SB 1178 now moves to the Assembly for approval.
From the C.A.R. press release:
“Currently, if a homeowner defaults on a mortgage used to purchase his or her home — known as a ‘purchase money mortgage’ — the homeowner’s liability on the mortgage is limited to the property itself,” said C.A.R. President Steve Goddard. “Unfortunately, the original law did not extend the purchase money protection to loans that refinance the original purchase debt, even if the refinance only was to obtain a lower interest rate. SB 1178 corrects this inequity and extends the same protections to consumers who refinance their home loans.
“Today’s vote was a victory for homeowners in California,” he said. “SB 1178 now moves to the Assembly for approval. C.A.R. is calling on our elected representatives to swiftly pass this much-needed legislation and send it to Gov. Schwarzenegger for signature.”