Victory for consumers as California Senate approves SB 1178 extending anti-deficiency protection
Measure protecting consumers from overreaching lenders now goes to Assembly
LOS ANGELES (June 3) – The California Senate this morning approved SB 1178 (D-Corbett) by a 30 to 4 vote, extending anti-deficiency protection for consumers who have refinanced their original mortgage loans and now are facing foreclosure. The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) is the sponsor of the consumer protection legislation.
“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. California Realtors are calling on our elected representatives to swiftly pass this much-needed legislation and to send it to Gov. Schwarzenegger for signature.”
For more information on what programs and help is available to homeowners facing problems with their mortgages visit FREE Help For Homeowners
