California Governor Arnold Schwarzenegger’s latest movie, The Expendables, is a summer hit and Californians are now waiting for him to morph into the homeowners’ hero by signing SB 1178, the bill extending anti-deficiency protection for consumers facing foreclosure who refinanced their original mortgage loans that was approved by the California Sate Assembly earlier this month.
Currently, if a homeowner defaults on a mortgage loan, their liability is limited to the property itself. However, homeowners who refinanced their original mortgages did not have the same protection. Sponsored by the California Association of Realtors (C.A.R.), SB 1178 was passed to protect homeowners in foreclosure from lenders suing for the difference between the value of the foreclosed property and the outstanding balance on the loan.
If the Governor signs the bill, it will become law effective June 2011.