Modification Legislation Passed in California 7/8

[Mike]

Check this out if you need a mod on a California property. Effective Tuesday 7/8 all lenders MUST contact borrowers by phone or in person before foreclosure proceedings are initiated. This is forcing lenders to communicate with borrowers to save their homes. If you are down on your payments and possibly facing foreclosure, you will be contacted. Be prepared and have your financial statements in order. This will definitely help us here in California! New California law offers a shield on mortgage defaultsBy Kevin Yamamura - kyamamura@sacbee.comPublished 12:00 am PDT Wednesday, July 9, 2008Mortgage lenders must contact California home borrowers to discuss loan modifications by phone or in person before entering foreclosure proceedings under a new law Gov. Arnold Schwarzenegger signed Tuesday.Senate Bill 1137, which takes effect immediately, prohibits lenders from filing a default notice until 30 days after contacting a borrower or making legitimate attempts to do so. The law by Senate President Pro Tem Don Perata, D-Oakland, also requires that tenants receive 60 days' written notice to vacate a property once it is foreclosed."Losing a home to foreclosure is a financial and also an emotional crash that takes sometimes years to overcome," Schwarzenegger said. "Foreclosure not only devastates families, but it hurts neighborhoods and it depresses our economy and our budget, and we lose a lot of jobs, of course."The Senate in January killed an earlier Perata bill that faced intense opposition from the mortgage industry and had stricter requirements, such as a face-to-face meeting between borrower and lender. SB 1137 did not face opposition and had bipartisan support.Perata and Schwarzenegger said that the law will help stem the tide of foreclosures in California by forcing lenders to contact home borrowers before starting costly proceedings. They suggested that early communication will encourage both parties to explore payment modifications that avoid foreclosure.California recorded 116,857 foreclosures in the first half of 2008, according to ForeclosureS.com, a Fair Oaks-based Web site.The monthly number of home loan modifications has increased since January, according to the California Department of Corporations. Lenders modified 9,448 loans in April and 8,686 loans in May, compared with 5,812 in January.Paul Leonard, director of the California office of the Center for Responsible Lending, a research and policy nonprofit group, said the goal of the law should be to encourage meaningful loan modifications for borrowers who can avert foreclosure rather than Band-Aids to cover up fundamentally bad loans."Obviously, the specific provisions are as yet untested, but the idea that all servicers will be required to follow a specific regimen of efforts to contact borrowers to discuss options that avoid foreclosure is a really good step forward," Leonard said.The new law also enables cities to impose fines of up to $1,000 a day on property owners who do not maintain vacant homes purchased in foreclosure, a tool aimed at preventing blight in hard-hit neighborhoods.--------------------------------------------------------------------------------