California imposes mandatory moritorium on foreclosures

[cobra]

For those living in California:

The state imposes a ban on foreclosures starting Moday. For those dealing with CW/BoA waiting on mods this might buy you some more time.

I hope so.


Cobra...NACA mod 5/29

[Tartbird]

Holy moly, that would be good. We are in CA and NACA just put us in for a "payment Plan" to CW. We shall see where this all leads us. We have already gotten our threatening letter from ReconTrust.

Tartbird

[cobra]

Go to Google News and type in foreclosures and the story should come up.
I think some other states, such as South Carolina already have done it. Others also maybe.
We need a national moritiroium to allow all these loan mods to get processed without people getting crazy about foreclosure. That would take the pressure off and would actually stimulate the economy a little bit.

Cobra

[NeedHelpwCW]

I heard that on the news the other night as well. However, I thought I heard something in the lines of "this moratorium does not apply to loans that were offered a modification."

[sarge]

Here is the loophole of that moratorium,

Under the California foreclosure moratorium law, regulators are given the authority to grant exemptions to loan servicers if they have existing mortgage modification programs that meet some criteria combination's, such as low interest rates for not less than five years, expansion of loan terms and deferment of a part of the loan principal.

Joe Ridout of the Consumer Action argued that it is impossible to defer $1,000 from the principal loan for 30 years.

To be eligible for exemption under the foreclosure moratorium law, a lender’s loan modification program should include a monthly mortgage payment adjustment of not less than 38 percent of distressed homeowners’ income.

[tandm]

SACRAMENTO, Calif. _ After a severe economic storm of more than 365,000 California foreclosures since early 2007, the state's long-awaited 90-day foreclosure moratorium law goes into effect Monday.

But it doesn't mean foreclosures will stop.


Supporters acknowledge the state is likely to see thousands more foreclosures before the crisis subsides. The law, indeed, goes into effect as lenders are ramping up repossessions following expiration of earlier moratoriums, according to housing trackers.

But the California Foreclosure Prevention Act, passed as Assembly Bill X2 7 by lawmakers in February and signed by Gov. Arnold Schwarzenegger, raises a new hurdle in the foreclosure process.

Backers say it will make lenders try harder to keep borrowers in homes. Starting Monday, loan servicers must prove to the state they have comprehensive loan modification programs in place or be denied rights to foreclose on their own schedules.

"You have voluntary programs that they don't have to do," said state Assemblyman Ted Lieu, a Torrance Democrat who was the author of the bill. "This creates an enforcement mechanism to force them to do it. The hammer is the 90-day foreclosure moratorium, which they all hate."

The law will largely press lenders to follow the Obama administration's Making Home Affordable Program that began in March. That encourages lenders to cut interest rates or rewrite loans to 40-year terms to get payments below 38 percent of a borrower's monthly income. Other options include reducing principal and tacking missed payments to the back of the loan. Under the law, California officials also can encourage short sales or deeds in lieu options in which banks accept less than owed for borrowers who want to leave or don't qualify for modifications.

"The vast majority of large servicers should have no trouble complying. They have already complied with similar requirements at the federal level," said Dustin Hobbs, spokesman for the California Mortgage Bankers Association.

As the nation's first statewide moratorium law of its kind, according to Lieu, hopes are it will "slow down the rate of foreclosures."

"For some people there's not much that can be done," said the lawmaker. "But there are a fair number of people on the bubble ... if they can get some assistance, they can stay in their home."

California Department of Corporations spokesman Mark Leyes said the state can't force or guarantee loan modifications. But the law is rooted in another state power that gives it leverage with lenders.

"What we do have control over is the legal process by which foreclosure is executed in this state," he said. Hence, adding 90 days to the process for those that don't comply.

Lieu said, "Not all banks are doing it at the same level. Some have good (modification efforts), some have bad ones and some have none."

Lenders have received widespread criticism for being overwhelmed by the foreclosure crisis and slow to rewrite loans despite receiving billions of dollars in federal assistance. Borrowers and nonprofit loan counseling agencies alike have complained of frustrating delays and snafus in the process.

On the front lines of the crisis it's easy to be wary about yet another new law or program.

"We're hopeful it will help, but in reality, time after time these things come out and the results are the same," said Pam Canada, executive director of the nonprofit counseling firm NeighborWorks Homeownership Center of Sacramento, Calif.


The new law represents a third evolution of California's response to a housing crisis that has severely damaged the economy and devastated local and state government budgets. In late 2007, Schwarzenegger entered into a voluntary agreement with subprime lenders to modify more loans.

Last summer, he signed Senate Bill 1137, which temporarily slowed 'banks' foreclosure machinery, making them work harder to contact borrowers and offer alternatives.

But foreclosures, while down in recent months, have continued in hard-hit California, especially in the capital region.

The region suffered almost 4,000 new foreclosures in January, February and March, and another 12,000 households are well behind on payments, according to Bay Area tracker ForeclosureRadar.

In summary, here's what will happen starting Monday:

_Lenders will submit applications to the state outlining their loan modification programs. That gives them a 30-day exemption from a moratorium.

_If the state OKs a lender's program, the firm is permanently exempt from the 90-day delay on foreclosures.

_If the state rejects the program as inadequate, a lender has 30 days to upgrade it and be reconsidered.

Leyes said consumers will be able to see a list of lenders that comply with the state's requirements by mid-July.

[tandm]

Cobra -

Thanks for finding this - good news for those of us in California!

[CW California]

Now we just have to work on our Governor and elected officials to really watch what efforts the lenders are taking on the modifications and not just paying lip service. It's such a complicated process that it's really easy for the lenders to screw with the programs and really be doing very little. All you California people, write letters and educate your officials of all the tactics we've come to know.

[marti]

I have a sale for this Wednesday June 17, 2009. NACA is trying to get the sale date postponed but I have not got confirmation that it has been done.
I've been really stressing out.
Does the California 90 day Foreclosure Moratorium mean that my sale date will not happen.

Thx

[huz715]

if bank has good programm but still find unacceptable reason don't do our loan modification , does the law force them do before foreclosure?

[cobra]

Marti and Huz;

Maybe someone who actually lives in Ca. can find out more for you. This story just my eye as I was googleing "foreclosures" on the internet.

Cobra

[rosalinda]

In summary, here's what will happen starting Monday:

_Lenders will submit applications to the state outlining their loan modification programs. That gives them a 30-day exemption from a moratorium.

_If the state OKs a lender's program, the firm is permanently exempt from the 90-day delay on foreclosures.

_If the state rejects the program as inadequate, a lender has 30 days to upgrade it and be reconsidered.
__________________________________________________ _____________________

I am trying to understand this also...can someone help to explain?

[Tartbird]

Well then the moratorium will be basically useless. Because on the surface CW/BA have good programs in place, HOWEVER, good luck getting them to give you one, or even be able to keep straight anything!

I am so sick of the talk from every governmental agency! They all keep acting like they are trying to help, but unless the FORCE these pig banks to help us it will mean NOTHING! They seem to be missing that one little fact....these greedy evil banks are not going to actually do anything to help us if they can possibly get away with it.

Tartbird

[huz715]

We should ask law maker change the law, force the bank do loan modification for all qualified people before forclosure.
Bank should take most of the responsibilty for the crisis,
they designed risked loan program, cause house price drop so much.
we can't sell, can't refinance.

[so-cal-gal]

It is now almost 1 year since SB 1137 went into effect here in Califoria. My CW loan meets all the requirements to be treated according to SB 1137. In response to member 'fehrll' questioning how many mortgage companies know of the law or are abiding by it? Well, two of the biggies, CW/BofA and Litton are sure doing their very BEST to ignore it. Many clauses of it have been ignored in my case by both. BUT read on to see my biggest gripe about these 2 and this bill.

I see the wording in the bill that IF they offer a modification package, the BORROWER has the choice of accepting it or not.

OK. They offered, I accepted. I did everything as specified in the mod package, getting it notarized, including required documents and returning it WELL BEFORE the required date by FEDEX.

BoA processed it to the point of determining that everything was in order. THEN THEY SOLD THE NOTE TO LITTON (but still claimed, when I called, that the mod was going into effect). The mod is now stranded at BofA, Litton has the note, Litton used the date of the mod by apparent accident(?) in the NOD they sent me. Litton is denying the mod exists (but ya' DID have a very interesting 'clerical error', right?). BofA never recorded the mod.

BofA now claims they have done 'nothing wrong' (per a certain manager who I have the name of - if she did not lie about her name).

SB 1137 has NO CLAUSE allowing the modification package that is accepted by the borrower to be rescinded by the lender's side of the group.

If there is a presumed right of the lender's group to strike down an offered modification package, WHAT IS THE USE OF HAVING REQUIREMENTS TO MAKE AN ATTEMPT TO NEGOTIATE AN AGREEMENT? That WAS the POINT of HAVING the bill RIGHT?

They did not even contact me about this mess. They only looked into it when I called to bug them. Attempts to get a mod directly with Litton have been futile.

They should BOTH be getting an interesting letter today - FROM MY ATTORNEY.

[so-cal-gal]

How do we check whether a lender has filed their modification program with the state of California?

[californiabofa]

We were denied a loan modification due to the investor not allowing any modifications but B of A is the servicer of the loan. Any ideas how that works with the foreclosures if they are not offering anything?

[so-cal-gal]

I myself would want proof that your note is investor-owned. I would not put it past them to lie. I suspect you may have trouble getting any type of verification of who really owns the note out of BofA without an attorney.

Basically, if your note is investor-owned, even the moratorium does not apply from what I have read.

Did any notice of transfer of your note occur within the past year? BofA (or CW) would (or should) have sent the notification.

Sorry to say, if there is absolute proof that the note is investor-owned and there is no evidence that they pulled any tricks, your options are limited.

You did already request the QWR?

Otherwise, if you are current on payments, check into a refi. If you are not current, my guess is that you need to consider a short-sale.

You might talk to an attorney before you actually list your home. Also, if you have a HELOC or second, you may need to file for bankruptcy. I don't think that you can use bankruptcy to keep the house.

Was your loan originally with CountryWide? If so, the CW lawsuit that CA and 15 other states settled gives 'relocation assistance'. I'm also presuming that you were not ever given an actual contract by CW.

Your situation with an investor-owner of the note is exactly why I have been fighting to make CW/BofA honor the modification CONTRACT they provided to me BEFORE they sold the note to Litton (most likely to a private investor using Litton as servicer). There ARE lawsuits regarding those CW CA AG settlement modification contracts not being honored. Looks like they are cropping up in several other states too. (15 different states joined in that lawsuit with CA AG Jerry Brown.)

[so-cal-gal]

Moratorium? The laugh is on anyone counting on this moratorium.

The lenders and servicing companies have all got the temporary (30 day) exemption and 95% of them actually are listed as having their PERMANENT exemption by filing their mortgage modification program with the state.

Just because they HAVE a program in place does NOT mean YOU will be offered a mod. Only about 10 % of cases that SHOULD qualify are actually offered a modification.

Other parts of the bills passed do still have to be adhered to. They have got to follow the new rules in California regarding attempts to contact you regarding the options (even if your note is investor-owned and the owner is not allowing modifications). They have got to document that they still made the attempts.

AFTER making all the necessary attempts required by the new law, any NOD that they file MUST cite what actions they took to contact and work out a plan with you. If they don't do that for any NOD filed after July 8, 2009 in CA, the notice is non-compliant.

I don't know if they have to 'undo' the filing before they try to 'fix it'. It would seem that they would need to do that to 'start over' with the NOD process.

I'll be able to update you on what can happen to a company that files a non-compliant NOD. My lawyer just spit another letter out at them. It certainly seems that they are doing a bunch of things that they should not be doing while there is a contested modification CONTRACT. They should not be making any reports of the missed payments to the credit reporting agencies while they have not fixed the modification. Now, the further public records that also damage credit that are also done while there is a contested modification contract AND they failed to even follow the law regarding the actual NOD? Those are federal rules they are stepping on regarding the credit reporting.