As promised…here is the section of the recently passed California SB 306 law. This new law revolutionizes the way Short Sales will be done in California…

Here is the readers digest version: (note: we read this beast 3-4 times and this is our translation of the bill…seek advice of an attorney if you want more clarification)

UPDATE: Read the update to this post HERE.

1) Once a short sale offer is submitted the lender would have 21 days to accept, reject or deny the offer. Understand, this means that the short sale package has to be submitted correctly…and completely.

2) A Short Sale offer is submitted WITH a HUD the lenders/ servicers have 4 days to reply to the offer. (Note: we sent this one over to our attorney to review.)

3) The lender will have to submit all responses IN WRITING.

Bottom line, Short Sales (in California) are about to get waaaay easier and close faster.

Agents if you are not doing Short Sales….why the heck not! The Golden Age of Short Sales is (finally) here. Watch the FREE Agent Short Sale Secrets video and download your FREE Agent Short Sale Secrets book!

SB 306 (Calderon)

Real property transactions.

LEGISLATIVE COUNSEL’S DIGEST

SB 306, as amended, Calderon. Real property transactions.

(1) Existing law requires that, upon a breach of the obligation of

a mortgage or transfer of an interest in property, the trustee,

mortgagee, or beneficiary record a notice of default in the office of

the county recorder where the mortgaged or trust property is

situated and mail the notice of default to the mortgagor or trustor.

Existing law, until January 1, 2013, prohibits a mortgagee, trustee,

beneficiary, or authorized agent from filing a notice of default for

an additional 30 days on loans made between January 1, 2003, to

December 31, 2007, that secure residential real property, under

certain circumstances.

This bill would, until January 1, 2013, provide that these

provisions apply to mortgages and deeds of trust recorded between

January 1, 2003, to December 31, 2007, secured by owner-occupied

residential real property containing no more than 4 dwelling units.

The bill would also, among other things, revise the declaration that

is required to be filed in this connection with the notice of

default.

(2) Existing law states legislative findings and declarations with

regard to the duty loan servicers have to maximize net present value

under their pooling and servicing agreements, stating that their

duty is owed to all parties in a loan pool, not to any particular

parties, and that a servicer acts in the best interests of all

parties if it agrees to or implements a loan modification or workout

plan, as specified.

This bill would specify the application of these findings and

declarations to certain investors.

(3) Existing law requires a trustee or authorized agent, upon

posting a notice of sale, to post and mail a specified notice

addressed to residents of property subject to foreclosure upon

posting a notice of sale. Existing law requires a notice of sale

to be recorded in the county in which the property, or some part of

it, is situated at least 14 days prior to the date of sale.

This bill would specify how and when this notice is to be mailed.

This bill would extend the time during which the

notice of sale must be recorded from 14 to 20 days.

(4) Existing law requires a beneficiary on a deed of trust or a

mortgagee on a mortgage to prepare and deliver a beneficiary

statement or a pay-off demand statement within 21 days of receipt of

a written demand from specified entitled parties. Existing law

requires the written statement to include information reasonably

necessary to calculate the payoff amount on a per diem basis for the

period of time, not to exceed 30 days, during which the per diem

amount is not changed by the terms of the note.

This bill would revise the period of time during which the

information reasonably necessary to calculate the payoff amount may

be prepared.

The bill would also , until January 1,

2014, require a beneficiary to prepare and deliver

, within 21 days upon written demand,

of the receipt of a short-pay request, as defined, to prepare

and deliver a short-pay demand statement, which would be a

written statement, conditioned on the existence of a short-pay

agreement, that is prepared in response to a request from an entitled

person or authorized agent, setting forth an amount less than the

outstanding debt, together with any terms and conditions, under which

the beneficiary would execute and deliver a reconveyance of the deed

of trust securing the note that is the subject of the short-pay

demand statement. The bill would provide that the short-pay agreement

is an agreement in writing in which the beneficiary agrees to

release its lien on a property in return for payment of an amount

less than the secured obligation. The bill would permit a beneficiary

that elects not to proceed with the transaction that is the subject

of the demand short-pay request to

refuse to provide a short-pay demand statement, but would require

that he or she provide a written statement, indicating that the

beneficiary has elected not to proceed. The bill would provide that

if the terms and conditions of the short-pay agreement require

approval by the beneficiary of a closing statement prepared by an

escrowholder, approval or disapproval shall be provided not more than

4 days after receipt by the beneficiary of the closing statement, or

the closing statement shall be deemed approved, except as specified.

(5) The Escrow Law provides for licensing and regulation of escrow

agents, other than certain exempt persons, by the Commissioner of

Corporations. The law requires licensees to apply for membership in

the Escrow Agents’ Fidelity Corporation, a nonprofit mutual benefit

corporation, which is established to indemnify its members against

loss of trust obligations. The law limits required membership in the

Escrow Agents’ Fidelity Corporation who engage in certain kinds of

business. Existing law defines and regulates the activities of

exchange facilitators and excepts from the definition of exchange

facilitator escrow companies, under specified circumstances.

This bill would provide escrow transactions that involve money or

property held or deposited with a person acting as an

pursuant to specified actions of an exchange

facilitator regarding deposit of funds are not

transactions that require a licensee to have membership in the Escrow

Agents’ Fidelity Corporation.

       

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