Governor Brown has signed Senate Bill 458 (Corbett) expanding anti-deficiency protection to all 1-4 unit residential mortgages or deeds of trust where the beneficiary consents to a short sale, whether a first deed of trust or a junior deed of trust. As an urgency bill, it became effective on July 15, 2011 when it was chaptered into law. The new law also limits the short sale anti-deficiency protections by excluding sales where the trustor is a limited partnership or LLC. Existing short sale law enacted in 2010 already excluded corporations.

The new law expands on short sale anti-deficiency legislation passed last year. Senate Bill 931 (Ducheny) was enacted last year in response to concerns that borrowers could have greater liability after a short sale than after a foreclosure. SB 931 prohibited a lender from obtaining a deficiency judgment as to a first mortgage or deed of trust following a short sale. Since SB 931 only applied to first mortgages, homeowners with more than one mortgage could still be liable to a junior note holder after the short sale.The new law addresses that issue. To read the official Senate Bill you can visit www.Senate.ca.gov.

RATE WATCH

Freddie Mac's Primary Mortgage Market Survey indicates the average 30 year fixed rate is 4.39% with .8% fees & points. 15 year fixed rates average at 3.54% with .7% in points & fees. Freddie Mac averages are for conforming mortgages with 20% down.

CARBON MONOXIDE DETECTORS

The Carbon Monoxide Poisoning Prevention Act of 2010 (Cal. Health & Safety Code SS 13260 et seq.) was signed into law this year. It requires carbon monoxide detectors be installed in every dwelling intended for human occupancy. To comply with this law, every owner of a "dwelling unit intended for human occupancy" must install an approved carbon monoxide device in each existing dwelling unit having a fossil fuel burning heater or appliance, fireplace or an attached garage. (Cal. Health & safety Code 17926a).

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