June 20, 2009

The California Foreclosure Prevention Act

First in the nation to impose a foreclosure moratorium

Lenders started foreclosure proceedings on a record number of California homeowners last quarter, 768 foreclosures and an astounding 68,000 preforeclosed properties in total.

John Walsh, DataQuick president said that The small increase in defaults from the first to the second quarter may indicate that we're nearing a plateau. We won't know until the end of the year, but it may be that some lenders are starting to prioritize workouts with homeowners instead of grinding things through the foreclosure process. Of course, they may just be swamped and can't handle processing any more paperwork,"

Either way the newly imposed moratorium on foreclosure in California will give everyone some breathing room. Following is a summary from California Assembly Member Ted Lieu's web site

1. Imposes a 90 day foreclosure moratorium to allow distressed homeowners time to work out loan modifications with their lenders.

2. Allows lenders to avoid the moratorium if they have a comprehensive loan modification program based, in part, on criteria set forth by the Federal Deposit Insurance Corporation. Loans may be modified several ways, including interest rate reductions, extension of the loan term, or principal reduction.

3. Provides oversight and accountability by requiring regular reports to the legislature on loan modifications and foreclosure reductions, and coordination with appropriate state regulators.
* Chart shows number of default notices filed in California during the first three months of 2009.
Thanks to dqnews.com

Howard Bell


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