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Effective January 1, 2013, a new California law will now protect borrowers on an owner-occupied residential property of not more than 4 units even if they refinance their original purchase money loan on or after January 1, 2013, so long as the homeowner does not "cash out" in the refinance. If the refinanced loan is purely a refinance of the original loan plus the cost of any attendant loan fees and related expenses, the borrower will now be afforded anti-deficiency protections. However, if the borrower pulls money out of the residential property to pay other bills, etc..), then the borrower would not qualify for California's anti-deficiency protections.
Unfortunately, the new anti-deficiency protections only apply to residential mortgage loans that are refinanced on or after January 1, 2013. As a result, homeowners who have refinanced their loans in the past will not be protected by the new legislation.
Tags: anti-deficiency, loan, refinanced loan
Posted In: Real Estate Reporter
Blog Categories:Business Law Bulletin
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Located in Los Angeles, California, the Law Office of Melissa C. Marsh handles business law and corporation law matters as a lawyer for clients throughout Los Angeles including Burbank, Sherman Oaks, Studio City, Valley Village, North Hollywood, Woodland Hills, Hollywood, West LA as well as Riverside County, San Fernando, Ventura County, and Santa Clarita. Attorney Melissa C. Marsh has considerable experience handling business matters both nationally and internationally. We routinely assist our clients with incorporation, forming a California corporation, forming a California llc, partnership, annual minutes, shareholder meetings, director meetings, getting a taxpayer ID number (EIN), buying a business, selling a business, commercial lease review, employee disputes, independent contractors, construction, and personal matters such as preparing a will, living trust, power of attorney, health care directive, and more.