California Short Sale Law| Print |
California Short Sale Law
Short Sales are influenced by California Case law, California anti-deficiency Statutes, California Association of Realtor contract forms, California contract law, (approval letters, escrow instructions, negotiated releases) loan servicer (think lenders) duties to their investors, third party rules promulgated by agencies like fannie mae and freddie mac and third party insurer rules (many investors insured their loans behind the scene with AIG, MGIC and others).
Short Sale Case law
Not many cases discuss short sales at the moment.
Why? Partially because short sale negotiations were not typically conducted by Realtors.
In the past bankruptcy lawyers would do the negotiating with the lender and then refer the listing out to Realtors as a straight sale.
The negotiation with the banks was fairly easy — “either release the deficiency in writing, or the bankruptcy court will.
Our advice is to listen to the CA Association of Realtors legal counsel. The CA Association of Realtor’s lawyer, Ms. Ling, stated at a CAR conference that her Realtors would never comment on the legal effect of a short sale approval letter because they are not licensed to do so.
1. Get all advice which could effect your credit, your taxes or you future income in writing on letterhead from the Broker, with the Brokers signature.
2. If you Realtor is going to make a big paycheck on the deal, you may wish to ask your Realtor to pay for an attorney chosen by you.
3. Have the attorney put his comments in writing and have him or her cite case law supporting his opinion.
We expect to see more short sale case law in the future.
California Anti Deficiency Statutes
CCP stands for California Code of Civil Procedure
California Association of Realtor Forms
The important ones are the California Association of Realtors Short Sale Listing Addendum and CA Short Sale Addendum – Purchase and Sale Addendum .
We will be discussing these forms at length.