To all my San Diego County Clients

1. There are no more Short Sale Deficiencies (primary residences only):  Starting January 1, 2011, a sellers first trust deed lender cannot obtain a deficiency judgment against the seller after the short sale (the bank or investor cannot come after you for more money).  Providing written consent to a short sale shall obligate the first trust deed lender to accept the sales proceeds as full payment and discharge the remaining amount owed on the loan.  This law applies to first trust deeds secured by one-to-four residential units, but does not limit the lender from seeking damages for fraud or waste by the borrower.  This is Senate Bill 931.

While there are many reasons why a bank/lender would choose to sell "short," the important question is:  What should you (as the seller of the property) know about this type of sale?  If you participate in this type of sale, please be aware that in some instances, you may be sued by the lender/bank for the money that was "forgiven."  The amount you did not pay back, which is a form of "debt forgiveness," may be taxed by taxing agencies.

Before "selling short," be sure to do the following:

A.  For Mortgage Forgiveness Debt Relief Act & Debt Cancellation tax information, visit:,,id=179414,00.html

B.  Seek the advice of an accountant

C.  See the advice of a lawyer

2.  Post-Foreclosure Protection for Tenants:  Beginning January 1, 2011, a notice to terminate a residential tenant who remains after a foreclosure sale must generally include a statutory notice of the tenant's rights.  The tenants will have a 90-day termination incorporated into the notice to terminate; not 30 or 60 days, the tenant will have at least 90 days to vacate the property.

3.  Energy Audit in Home Inspection Report:  Beginning January 1, 2011, a home inspection and inspection report may, upon the clients request, include an audit of the energy efficiency of a home that you may be buying.  Some inspection companies charge for this important information, some don't.  Be sure to ask your Realtor.

4.  Enforcement of Mortgage Loan Officer Requirements:  Starting January 1, 2011, anyone acting as a mortgage loan originator (MLO) without an MLO license will be guilty of a crime punishable by 6 months imprisonment, plus a $20,000 fine.  Furthermore, a broker cannot employ or compensate a real estate licensee for MLO activities unless the MLO has an active license.