Attention homeowners! We have yet, another mortgage assistance bill to supposedly help you out and impose restrictions on mortgage servicers who “do not have” a loan modification program in place. Well, last time I checked (daily), almost every single lender and mortgage servicer has some type of shitty program in place.
Yes, I said shitty.
Meaning their programs for the most part are BS, crap, a big ole heaping pile of steaming cow dung. Crappy systems, uncaring employees, call centers in India, too many bad loans, calls, mail and SIMPLY NOT ENOUGHT STAFF to handle the incoming wounded homeowners.
Almost like going to the California DMV on a hot summer day to renew your license in the Twilight Zone and your number is 1,987,234.
Scary isn’t it???
But hey, in California, as long as you have a “program” in place, you are A-OK with law makers.
Sorry I am soooo cynical about this new bill and lawmakers, but I just can’t help from opening my big blogging blabbermouth. God gave me this mouth and blog for a reason and that reason is to tell the truth!
I just wish they would read this blog and over at my forum, www.LoanSafe.org. Then they would see exactly how homeowners are getting treated and not getting help in a timely manner or if at all.
I have been blogging and following these darn mortgage servicers for 2 years and I have see it all folks. What I haven’t seen is the effort to back up all these words, press releases and bills. Just a bunch of hot air, smoked mirrors and cow dung.
The bill, called the California Foreclosure Prevention Act, was introduced by Sen. Ellen Corbett, D-San Leandro, and attached to the budget package in February. The 90 foreclosure moratorium takes affect June 15 and covers owner-occupied homes where the first loan was recorded between Jan. 1, 2003, and Jan. 1, 2008.
Here is the kicker….
The requirement for an additional 90 days does not apply to a mortgage loan servicer who has applied for, and received an exemption from the provisions of this new law.
There really should be some type of law making it mandatory that these chumps have x amount of employees in regards to x amount of delinquent loans. If any of these government agencies were to research this, they would find that mortgage servicers are operating at 1000-3000 files per employee. YES, that many! And you want to know how many files a loss mitigation representative can effectively manage, 100-150 max!
Most likely, every home loan servicer will likely make application for an exemption. I can almost guarantee that lenders will not likely have a hard time obtaining an exemption from the law. The good news is that the Secretary of Business, Transportation and Housing is required under the law to maintain a website that lists disclosure of what loan servicers have made application for an exemption, and what the disposition of that application was.
California’s non-judicial foreclosure process requires a mortgage loan servicer to wait at least three months between filing a notice of default and issuing a notice of sale. As amended, this bill extends that time period by 90 days for owner-occupied homes where the first loan was recorded between January 1, 2003 and January 2, 1008.
The loan modification program is intended to keep borrowers whose principal residences are homes located in California in those homes when the anticipated recovery under the loan modification or workout plan exceeds the anticipated recovery through foreclosure on a net present value basis. The loan modification program targets a ratio of the borrower’s housing-related debt to the borrower’s gross income of 38 percent or less, on an aggregate basis in the program.
This relief is limited to loans that meet the following criteria:
- The Loan must be a first-priority mortgage or first deed-of-trust
- The Loan must be secured by the borrower’s primary residence
- The Loan must have been recorded between January 1, 2003 and January 1, 2008
- The borrower must have occupied the property as their primary residence at the time they became delinquent on the loan
- A Notice of Default has been recorded against the property
- The Loan cannot be one made, held or serviced by a California State or local housing agency or authority or cannot be collateral for securities held by one of the foregoing agencies.
- An interest rate reduction, as needed, for a fixed term of at least five years
- An extension of the amortization period for the loan term, to no more than 40 years from the original date of the loan
- Deferral of some portion of the principal amount of the unpaid principal balance until maturity of the loan
- Reduction of principal
- Compliance with a federally mandated loan modification program
- Other factors that the commissioner determines are appropriate
- In determining those factors, the commissioner may consider efforts implemented in other jurisdictions that have resulted in a reduction in foreclosures
- When determining a loan modification solution for a borrower under the loan modification program, the servicer seeks to achieve long-term sustainability for the borrower
In addition to the exemption available to lenders who prove to the Commissioner that they have a legitimate program for loan modifications in place, the additional 90 days does not apply in the following situations:
- Where the borrower has surrendered the property to the lender or otherwise abandoned it
- Where the borrower has contracted with a firm “whose primary business is advising people who have decided to leave their homes regarding how to extend the foreclosure process and avoid their contractual obligations to the mortgagee or beneficiaries
- Where a proceeding has been filed in Bankruptcy Court, and either the proceeding is not dismissed, closed nor granted relief from stay for the foreclosing creditor.
More from the State of California:
For purposes of this law, persons covered include those licensed by (1) the California Real Estate Commissioner as Real Estate Brokers (and therefore salespersons working under their license), (2) the California Commissioner of Corporations as licensed Residential Mortgage Lenders and Servicers and/or licensed Finance Lenders and Brokers, and (3) the Commissioner of Financial Institutions for Commercial and Industrial Banks, Savings Associations and Credit Unions who service mortgage loans.
EFFECTIVE DATE: JUNE 15, 2009 BACKGROUND INFORMATIONOn February 20, 2009, Governor Schwarzenegger signed ABX2 7 and SBX2 7, which establish the California Foreclosure Prevention Act (CFPA). The CFPA modifies the foreclosure process to provide additional time for borrowers to work out loan modifications while providing an exemption for mortgage loan servicers that have implemented a comprehensive loan modification program.
Civil Code Section 2923.52(a) requires an additional ninety (90) day period beyond the period already provided before a Notice of Sale can be given in order to allowall parties time to pursue a loan modification to prevent foreclosure of loans meeting certain criteria. A mortgage loan servicer who has implemented a comprehensive loan modification programmay file an application for exemption from the provisions of Civil Code Section 2923.52(a).
Approval of this application provides the mortgage loan servicer an exemption from the additional 90 days before filing the Notice of Sale when foreclosing on real property as designated by this Section. A mortgage loan servicer is not required to apply for the exemption; however, beginning June 15, 2009 all mortgage loan servicers who have not applied for an exemption are required to wait an additional 90 days before filing the Notice of Sale, when foreclosing on a residential mortgageloan meeting the criteria established in Civil Code Section 2923.52(a).
OBTAINING EXEMPTION FROM CIVIL CODE SECTION 2923.52(a)Effective June 1, 2009, Subchapter 14 is added to Chapter 3, Title 10 of the California Code ofRegulations. These emergency regulations clarify the application of Sections 2923.52 and 2923.53 of the Civil Code under the California Foreclosure Prevention Act. Subchapter 14, also known asSecurities Franchises Off-Exchange Commodities Investment and Financial Services Independent Escrows Consumer and Commercial Finance Lending Residential Mortgage LendingSACRAMENTO 95814-4052 SAN FRANCISCO 94105-2980 LOS ANGELES 90013-2344 SAN DIEGO 92101-3697 1515 K STREET, SUITE 200 71 STEVENSON STREET, SUITE 2100320 WEST 4THSTREET, SUITE 750 1350 FRONT STREET, ROOM 2034 (916) 445-7205 (415) 972-8559 (213) 576-7500 (619) 525-4233 1-866-ASK-CORPwww.corp.ca.gov1-866-275-2677
CALIFORNIA FORECLOSURE PREVENTION ACT Page 2 the California Foreclosure Prevention Act sets forth the minimum requirements for a comprehensive loan modification program under Civil Code Section 2923.53 in order for a mortgage loan servicer to obtain an order of exemption from Civil Code Section 2923.52(a). To obtain the exemption, a licensee must submit the application in accordance with Section 2031.7 of Subchapter 14. The application form is entitled Application For Order of Exemption From Civil Code Section 2923.52(a), California Foreclosure Prevention Act and is available on the Department’s website at www.corp.ca.gov. Upon receipt of an exemption application that is substantially complete, a temporary order will be issued granting the applicant a 30-day temporary exemption from the requirement of Section 2923.52(a) of the Civil Code. Upon approval of the application, a final order of exemption will be issued.
WHO MUST FILE THE APPLICATIONLicensees of the Department of Corporations under either the California Finance Lenders Law or the California Residential Mortgage Lending Act who wish to obtain an exemption from the additional 90 days required under Civil Code section 2923.52(a). In addition, any other entities servicing residential mortgage loans on properties located in California that wish to obtain an exemption, and are not required to file with the Departments of Financial Institutions or Real Estate as indicated in Section 2031.7 of the California Code of Regulation. WHERE TO FILE THE APPLICATIONThe application must be submitted to: DEPARTMENT OF CORPORATIONS FORECLOSURE EXEMPTIONS 320 WEST 4THSTREET, SUITE 750 LOS ANGELES, CA 90013-2344 For questions regarding the California Foreclosure Prevention Act, please call 1-866-ASK-CORP or 1-866 275-2677.
Whether this 90-day moratorium or the incentive provided by the bill for servicers to implement loan modification programs (or at least report on the existence of one to state regulators) will increase the number of modifications, despite the obstacles discussed above, remains to be seen. The state legislature hopes it will be seen via the web. One interesting aspect of the new law is that “within existing resources,” the state regulators will collect from servicer’s data regarding loan modifications and make that data available on a website at least quarterly.
I can’t wait to get my hands on those shitty results!
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Shitty plans, Shitty borrowers that think they can lower their payment when they arleady are at the lowest they can be. I mean be freakin reasonable that the banks are attempting to do all they can but when you deal with a borrower that has a 500k loan and a payment of 1500.00 it simply impossible to reduce the payment.They are on negative arm loans and should of never gone into them. Normal calculation would tell you that is not a normal payment on half a mill loan. Borrowers that are not in a financial hardship claim to have one just jumping into the bandwagon making it harder for those who really need the help!!!!!
Half a mill at 1500 a month. Are you stupid? Do the math bimbo that could never happen no matter what scenario you come up with. I guess you never graduated college or probably HS. 500k a month at interest only at5.675 is 3400 with property taxes. Even if you subtract the prop taxes it is still 2500.