Recently, I wrote an article Sacramento Getting Some GREAT Real Estate News which talked about how this bill would help some homeowners who desperately needed help with deficiency judgments who had refinanced their original loans.
Governor Schwarzenegger had an opportunity to sign Senate Bill 1178 but unfortunately chose to veto the bill instead. This will effect all Short Sales and Foreclosures who refinanced their original loan.
Now, there is no protection in place for a deficiency judgment. The Governor believes that signing this bill would have encouraged homeowners to strategically default on their loans just because the properties had lost value when they have the means to pay.
I would agree that those homeowners who refinanced and robbed their equity to purchase vacations, boats or who chose to strategically default. should endure the pain of an anti deficiency judgment against them. But, Governor there are a lot of homeowners and investors out there that have not done this…what about them?
I do not agree with the Governor when it comes to those who may have used the funds for medical purposes or simply refinanced and did not take any equity out but tried to get a better loan and hang-on during this economic crisis. You might ask if it would be easy to prove if a refinance of an original loan would have qualified under these circumstances. My answer is YES.
For those who refinanced and took NO money out, it is extremely obvious and for those who had medical expenses and needed the funds from their home, bills and dates can be verified. Not everyone fits into the Governor’s little box, there are exceptions, I see them everyday.
My heart goes out to those Sacramento homeowners and investors who refinanced for all the right reasons and yet our California Governor has decided to ignore you and make deficiency judgment something that will continue to keep you up at night, worrying.
There has been plenty of money given to bail out the banks and car dealers but there appears not to be any help for distressed California homeowners who refinanced their original loan for good reasons.
What are your thoughts on this?
Do you think that homeowners who refinanced their loans for medical purposes and/or to get a better loan should be treated the same as those who refinanced and took money out for pleasure and paying off credits cards or stategically defaulted? Did anyone ever ask the banks about their irresponsibility or did we just hand over tax payer money? Just my thoughts…what are yours?
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