Sellers who are able to negotiate short sale approval with their lender(s) may face consequences and ramifications on state and federal levels. We have provided some information on legislation regarding the forgiveness of debt, but it is advisable for sellers to contact legal and/or tax advice from a trusted professional for a complete understanding of the ramifications for your particular situation.

Mortgage Debt Forgiveness
Some lenders may claim debt they have forgiven as a loss for tax purposes and issue the borrower a 1099 form for the lost amount. Click the links below for information on this at the state and federal levels:

California State Law: SB 1055
Federal Law: Mortgage Forgiveness Debt Relief Act of 2007

California Foreclosure Law
In California, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process. Non-judicial foreclosures are the most common in California, however, judicial foreclosure is used on a rare occasion. The foreclosure timeline is typically 120 days from the time you miss your first payment until a Notice of Default is issued and then the actual foreclosure date and sale.

For more information on California foreclosure laws and regulations, contact the California Attorney General's office or visit the following website and click on California:

Client Resources

    - Getting Started
    - Options for Homeowners
    - Laws
    - The Hardship Letter
    - FAQs
    - Selecting an Agent
Real Estate Agents
    - Why work with SSA?
    - Forms
    - Qualifying Your Seller
    - At the Listing Appointment

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