Short Sale Bill To Help Halt Foreclosures
A proposed bill, AB 1745, will prevent lenders from pursuing a foreclosure simultaneously while an approved short sale is active.
Currently, there are lenders who will keep the foreclosure process active, side by side with a short sale. Foreclosure and bill collecting departments will call the borrowers, demanding pay, and daunt them with the foreclosure date. There have also been situations where during a short sale process, if the foreclosure date nears, the lender will automatically foreclose on the property. Many times, the problem is that different departments don’t communicate with each other; the foreclosure department will keep foreclosing, while the short sale department will keep on pursuing a short sale.
The proposed bill will prohibit a lender from recording a Notice of Sale if there has been an approved short sale on the same property. However, lenders are still allowed to withdraw from approval on the short sale and pursue foreclosure if there are legitimate reasons. If they choose to withdraw, they must provide the sellers a written notice at least three days prior to doing so.
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