California Loan Modification

Archive for June, 2010

Loan Modification Help Center – Do Not Trust the Interest Rates

Are you having a hard time refinancing your loan?  Have you noticed that interest rates are fluctuating like crazy?  Well, unfortunately, the real estate market is going nuts these days trying to find the top, the bottom or just some sense of stability.

Recent news coming out of Mortgage Finance magazine confirms that recent spikes in mortgage rates have consumers wondering whether they have missed the chance to refinance.  After months, and almost years, of incredibly low interest rates, the declining rates seem to be at an end.  However, no one knows what the situation is, and it has the entire industry in flux once again.

For example, some in government positions are saying that the housing crisis is almost over, while banking titans and Wall Street financial gurus are claiming the opposite.  Mortgage interest rates are up one day, down the next, and homeowners are being slammed in the process. The interest rate you get this week might be worse than what you could get next week.

Solutions

If you are trying to refinance because you are in a difficult financial situation, a loan modification might be the answer you are looking for.  Refinancing your house is incredibly difficult, especially if you have bad or poor credit.  If you have not stayed on top of your credit score, or if your current financial troubles have affected every area of your life, refinancing might not be the option for you.  A California loan modification does not hinge upon what your past credit score is, it hinges more upon your ability to continue to make payments throughout the course of your loan.  If you have a subprime mortgage with payments that are ballooning, a loan modification might be a more effective avenue than refinancing.

Fluctuating interest rates means that lenders might just sit back and allow the rates to fluctuate until it serves them best.  If this is the case, you could be stuck with a terrible interest rate for months, or even years.  With a loan modification, you could hire a loan modification attorney to work on your behalf to get your interest rate lowered to something you can afford.  As opposed to a spiking subprime interest rate, you might be able to get something substantially lower and/or a fixed interest rate.  Either of these could go a long way towards lowering your monthly mortgage payments and giving you more financially flexibility and stability.  Many analysts are stating that the interest rates will spike heavily once the government’s efforts to buy mortgage-backed securities ends.  Any efforts to kick-start the economy will collapse if that happens, and refinancing will be near impossible.

A California loan modification attorney might just be your new best friend.  They have options available to you that you may not have explored, or even thought about.  While refinancing at times can depend upon the mood of the banker, a loan modification attorney will work aggressively to get you terms you and your family can live with.

Avoid the fluctuating interest rate game and contact a California home loan modification attorney today!

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Loan Modification Help Center – SB94 Details

Governor Schwarzenegger recently signed a bill into law known as SB94. This bill, authored by California State Senator Ron Calderon, the Chair of the Senate Banking Committee, is designed to help homeowners protect their best interests. The bill forbids California loan modification attorneys from accepting “advanced upfront fees.” This bill, which is intended to help protect homeowners from loan modification scam artists, could have the unintended consequence of prohibiting legitimate attorneys from helping people on the brink of foreclosure.

SB94 Details

SB94 will have the following affect on California loan modification attorneys, law firms and companies (including real estate companies and real estate brokers):

• California loan modification law firms, and all other entities, would no longer be allowed to accept upfront fees for their services.

• All California loan modification attorney teams must inform the consumer that they can do the loan modification on their own or with the assistance of a government approved nonprofit.

• The relationships between real estate brokers and attorneys will be severely diminished.

The Loan Modification Help Center
has done a great deal already to protect consumers and homeowners alike, and this law will simply alter how the Loan Modification Help Center accepts fees. For many shady or underhanded loan modification operations, this will surely shut them down, or risk jail time and fines for the violators.

Challenge for Homeowners?

California homeowners have had a difficult few years; between the difficult financial crisis, the loss of equity in many homes and the overall state of unemployment, people are struggling to keep their homes. In the past, many homeowners who were in trouble could turn to a California loan modification attorney because there were only a few out there and very few scams. Using a qualified California loan modification attorney can help any homeowner keep their home, avoid foreclosure and get their monthly mortgage payments far lower. However, when the economy turned sour, homeowners were turning everywhere for help and many were taken advantage of. These scams led the general public to distrust every California loan modification attorney, regardless of their background.

For homeowners, the challenge will be to find a qualified, experienced and legitimate California loan modification attorney who can turn their situation around. Finding a competent, effective California loan modification attorney became difficult because people were almost assuming that anyone who could help with a loan modification was a thief. Fortunately for homeowners in California homeowners, there are law firms which can help them get a loan modification. At the The Loan Modification Help Center, our California loan modification attorney team has a long track record of protecting people’s homes. In addition to the numerous testimonials on their website, there is a long line of people who are grateful for the Loan Modification Help Center’s assistance.

If you are a homeowner who is facing a difficult financial challenge, you should contact a qualified California loan modification attorney today. Keeping your home should be your top priority, and so should be finding highly skilled people to help you in this endeavor.

Visit us at The Loan Modification Help Center
or call 800-486-9836.

Legal Disclaimer

The information contained herein is provided for general information and advertising purposes only and is not intended to convey a legal option nor legal advice for any particular case or situation. Nothing in this article shall create an attorney-client relationship. Nothing sent to this law office via e-mail shall constitute an attorney-client relationship. Nothing contained in this article shall be construed to be a guarantee or prediction of result. Prior results are provided for general information purposes only and do not guaranty, warranty or predict a similar outcome with respect to any future matter. Results achieved depend on individual circumstances and not everyone will qualify or be successful in restructuring their mortgage loan.

More California Lawyers in Trouble for Foreclosure Activities

The State Bar’s loan modification task force obtained the resignations of three more California attorneys as a result of misconduct related to their loan modification activities. It also placed another attorney on inactive status, charging his work poses a substantial threat to the public, and has undertaken similar efforts against two other lawyers.

In addition, JAMES PARSA [#153389], a southern California lawyer who advertised his loan modification work on television throughout the state, resigned Oct. 21. He faced interim suspension from practice as a result of a 2001 misdemeanor conviction for sex with a child under 18 that he never reported to the bar.

Parsa, 44, advertised heavily throughout California for the past several months, offering to help homeowners facing foreclosure. Although he provided evidence to the bar that he was in fact working on cases, an investigator uncovered two 2001 misdemeanor convictions for sex with an underage girl. The bar court ordered that Parsa be placed on interim suspension Oct. 16, but his resignation made the suspension moot.

The State Bar created a 10-person loan modification task force in March after receiving thousands of calls from homeowners complaining that lawyers have done no work after taking fees purportedly to help avoid foreclosure. The task force had 738 active investigations underway last month.

It earlier released the names of 16 attorneys it was investigating for possible misconduct related to loan modification. Four of the six who resigned or face inactive enrollment were on that list.

“We are very pleased that we have been able to remove these practitioners from the practice of law quickly in order to protect the public,” said Interim Chief Trial Counsel Russell Weiner.

Until last month, attorneys were able to legally accept advance fees from borrowers for residential loan modification work and other forms of mortgage loan forbearance services. Lawyers’ services were in demand by foreclosure relief companies and operators that could not otherwise receive payment until contracted or promised loan modification work was completed. However, on Oct. 11, Gov. Schwarzenegger signed SB 94, which prohibits attorneys and any other persons from collecting an advance fee for residential loan modification and mortgage loan forbearance services. The measure took effect immediately. Details about the new law are at the Department of Real Estate home page, www.dre.ca.gov.

New law prohibits advance fees for lawyers doing foreclosure work

Gov. Schwarzenegger signed Senate Bill 94 Oct. 11, immediately prohibiting any person, including attorneys and real estate licensees, from collecting an advance fee to perform foreclosure relief services. The new law, adopted as an emergency measure, closes a loophole that permitted foreclosure scam artists to exploit the ability to charge advance fees.

It is now unlawful for any licensed attorney or real estate agent “who negotiates, attempts to negotiate, arranges, attempts to arrange, or otherwise offers to perform a mortgage loan modification or other form of mortgage loan forbearance for a fee or other compensation paid by the borrower … to claim, demand, charge, collect, or receive any compensation until after the [attorney or agent] has fully performed each and every service the licensee contracted to perform or represented that he, she, or it would perform.”

The advance fee prohibition for loan modification and forbearance services applies to residential property containing four or fewer dwelling units.

The new law also requires the following written disclosure in at least 14 point bold type regarding loan modification and/or loan forbearance services prior to entering into any fee agreement with a borrower:

“It is not necessary to pay a third party to arrange for a loan modification or other form of forbearance from your mortgage lender or servicer. You may call your lender directly to ask for a change in your loan terms. Nonprofit housing counseling agencies also offer these and other forms of borrower assistance free of charge. A list of nonprofit housing counseling agencies approved by the United States Department of Housing and Urban Development (HUD) is available from your local HUD office or by visiting www.hud.gov.”

If loan modification or other loan forbearance services are offered in Spanish, Chinese, Tagalog, Vietnamese or Korean, a translated copy of the disclosure above must be given to the borrower in that language.

A violation of the law can result in fines and up to a year in jail.

The text of SB 94 is available at leginfo.ca.gov; click on “bill information.” Information is also available from the California Department of Real Estate at dre.ca.gov.

Home Loan Modification Scams

There is a lot of talk today about unfair loan modifications. In this economy, mortgage loan modification is a good option for many people struggling to repay their debts, but reports of predatory modification companies have some homeowners afraid to act.  Some individuals have been taken advantage of, particularly in the California loan modification scams, by companies who take their money and provide no results.  With the help of qualified, respected attorneys like those at Feldman Law Center, however, home loan modifications can save borrowers from a lifetime of unmanageable debt.

There are many options for loan modification, and it is wise to seek out the best possible loan modification advice.  For example, you may be wondering about federal loan modification law.  The FDIC loan modification program may be able to help you, but it may not.  Unethical modification companies may not tell you about all of your options, preferring instead to make empty promises and return nothing. The attorneys at Feldman Law Center, however, know exactly which homeowners can be helped by federal loan modification and will gladly recommend government assistance if that is what is right for your situation.  More likely, however, you will need to consider other options, as the FDIC’s loan modification program promises help to only to a specific segment of homeowners.

If you are struggling to make ends meet and saddled with unrealistic payments, principle reduction, rate reduction, or another form of modification to your loan may be possible without federal assistance.  This indeed ought to be a key indicator of the trustworthiness of any loan modification company.  It is crucial to examine your own specific situation to determine what kind of help would be most beneficial to you.  Any company that charges an unwieldy up front fee with no apparent concern for your circumstances is likely to cause more harm than good.  Do not enter into any loan modification agreement with anyone unless you understand precisely how they will help, and they have demonstrated their ability to negotiate specifically on your behalf.

The loan modification process can be frightening, but it is possible to find debt relief in many situations.  Another key to avoiding unethical or untrustworthy loan modifications is to pay attention to what you are being promised.  Any company that can claim to be able to get you a specific rate reduction or to reduce your principle by a specific amount before judging your circumstances or negotiating with your lender cannot be telling the truth.  Without speaking to a lender about a specific loan, it is impossible to know how much can reasonably be promised in the way of principle reduction or interest rate reduction.

Hardship modification has become necessary for many people, and finding a trustworthy loan modification attorney can be very tricky.  You can, however, place your trust in the Feldman Law Center.  Our loan modification programs can provide you with help to get your debt back under control.  Unlike the predatory loan modification companies, we will not take any action that does not benefit you.  With loan modification help from our experienced attorneys, your unrealistic payments could become a thing of the past. Visit us at http://www.feldmanlawcenter.com or call 800-588-0425

Loan Modification Law – California State Senate passes Bill 94

The California State Senate has passed Senate Bill 94 (”SB 94?), legislation proposed by Sen. Ron S. Calderon (D-Montebello), Chairman of the Banking, Finance & Insurance Committee. The senate passed the bill on May 21, 2009, by a vote of 21 to 14. It is now in the state assembly where it has been read once and “held at desk,” which means that it’s awaiting referral to a committee.

Senate Bill 94 is intended to protect California homeowners from scam loan modification companies.

In my view, the problems with SB 94, as written include:

1. It was created to protect consumers from loan modification “scammers” who charge distressed homeowners up front fees and deliver nothing in return, but it was written without the benefit of accurate data on the contribution being made by the legitimate loan modification industry in California. Without knowing how many homeowners the private sector loan modification firms save each month, or the sustainability of the modifications obtained by the private sector, it would not be possible to design a solution in the best interests of homeowners and the state’s economy.

2. The SB 94 bill, as written, is based on a fundamental misconception. As stated in the in bill’s narrative:

“It is not necessary to pay a third party to arrange for a loan modification or other form of forbearance from your mortgage lender or servicer. You may call your lender directly to ask for a change in your loan terms. Nonprofit housing counseling agencies also offer these and other forms of borrower assistance free of charge.”

While both of these statements are technically true, this language ignores the fact that there are also reputable private sector firms that homeowners may choose to hire to help them negotiate with their banks when seeking a modification of their mortgages. Private sector firms, including those licensed by the state’s Department of Real Estate and/or law firms offering that such services, have helped tens of thousands of California homeowners get their mortgages modified. With the number of foreclosures continuing to increase each month, it would seem clear that the state’s homeowners would not benefit from any legitimate avenue being overlooked or unfairly maligned.

3. Defrauding a homeowner has always been against California law, so in that sense, SB 94 is redundant. When you consider that “scammers” who did in fact defraud consumers in conjunction with the promise of a loan modification, did so in violation of existing law, it would seem that a new law making it illegal to charge an advance fee when offering to assist a homeowner with a loan modification would be unlikely to prevent future scammers from attempting to do the same.

4. Legitimate firms offering to assist troubled homeowners could be regulated and monitored, without requiring these firms to operate at a financial disadvantage by disallowing advance fees. The process of obtaining a loan modification is not similar to other real estate transactions in several key ways:

A. The process can take six weeks, or six months… and in some cases even longer. The lenders and servicers are not consistent in how loan modifications are handled or on what basis they are granted.

B. There is no escrow, or objective standard for “satisfaction,” in conjunction with a loan modification transaction, and therefore there is no assurance that a company would receive payment from the homeowner once the mortgage has been modified.

These are just a few of the issues with SB 94. The law is attempting to protect homeowners, but is actually protecting the lender guaranteeing that homeowners will not be adequately represented when dealing with the lender. The lenders will take advantage of this and will offer homeowners loan modifications that do not help their situation.

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California A+ BBB Home Loan Modification Programs | San Diego

For A+ BBB California Mortgage Loan Modification Services go to www.yourhomestart.com

In April 2009, the Obama administration took steps to bolster the troubled housing market by implementing the Homeowner Affordability and Stability Plan (HASP). With a billion total budget, the plan aims to help a projected four million homeowners over the next three years by reducing monthly interest rates and encouraging borrowers to adopt a loan modification plan. Among those banks committed to Obama’s plan are three of the nation’s largest; JP Morgan Chase, Wells Fargo, and Citigroup are all dedicated the effort.

Homestart provides A+ BBB rated loan modification service to customers of these banks as well as Bank of America, US Bank, Wachovia, Countrywide and many others. Homestart’s established personal relationship with the country’s leading mortgage lenders has made it one of the nation’s leading loan modification service companies, and they are one of the few loan modification companies to have the accredited A+ rating from the Better Business Bureau, as well as a license issued by the California Department of Real Estate (DRE).

Although California is currently seeing a slight decline in foreclosure activity, the rate of foreclosures in recent years is staggering, especially considering California is home to one in nine Americans and has 8.5 million houses. Furthermore, with an unemployment rate as high as 12.5 percent, Californians will continue to rely on the HASP as well as the California Mortgage Foreclosure Prevention Act, which went into effect June 15, 2009 to help them through the tough times.

HomeStart’s extensive experience working in the loan modification industry provides them with great expertise in working through even the most difficult applications and terms. Contact Homestart at anytime to discuss your financial hardship- we will listen and maintain the highest level of confidentiality. We have an entire team of experienced loan modification consultants who can help answer any questions you may have, regardless if you pursue a loan modification through HomeStart.

For more information please go to www.YourHomestart.com

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The Feldman Law Center – Home Loan Modification Scams

The Feldman Law Center – Home Loan Modification Scams

There is a lot of talk today about unfair loan modifications. In this economy, mortgage loan modification is a good option for many people struggling to repay their debts, but reports of predatory modification companies have some homeowners afraid to act. Some individuals have been taken advantage of, particularly in the California loan modification scams, by companies who take their money and provide no results. With the help of qualified, respected attorneys like those at Feldman Law Center, however, home loan modifications can save borrowers from a lifetime of unmanageable debt.

There are many options for loan modification, and it is wise to seek out the best possible loan modification advice. For example, you may be wondering about federal loan modification law. The FDIC loan modification program may be able to help you, but it may not. Unethical modification companies may not tell you about all of your options, preferring instead to make empty promises and return nothing. The attorneys at Feldman Law Center, however, know exactly which homeowners can be helped by federal loan modification and will gladly recommend government assistance if that is what is right for your situation. More likely, however, you will need to consider other options, as the FDIC’s loan modification program promises help to only to a specific segment of homeowners.

If you are struggling to make ends meet and saddled with unrealistic payments, principle reduction, rate reduction, or another form of modification to your loan may be possible without federal assistance. This indeed ought to be a key indicator of the trustworthiness of any loan modification company. It is crucial to examine your own specific situation to determine what kind of help would be most beneficial to you. Any company that charges an unwieldy up front fee with no apparent concern for your circumstances is likely to cause more harm than good. Do not enter into any loan modification agreement with anyone unless you understand precisely how they will help, and they have demonstrated their ability to negotiate specifically on your behalf. The loan modification process can be frightening, but it is possible to find debt relief in many situations. Another key to avoiding unethical or untrustworthy loan modifications is to pay attention to what you are being promised. Any company that can claim to be able to get you a specific rate reduction or to reduce your principle by a specific amount before judging your circumstances or negotiating with your lender cannot be telling the truth. Without speaking to a lender about a specific loan, it is impossible to know how much can reasonably be promised in the way of principle reduction or interest rate reduction.

Hardship modification has become necessary for many people, and finding a trustworthy loan modification attorney can be very tricky. You can, however, place your trust in the Feldman Law Center. Our loan modification programs can provide you with help to get your debt back under control. Unlike the predatory loan modification companies, we will not take any action that does not benefit you. With loan modification help from our experienced attorneys, your unrealistic payments could become a thing of the past. Visit us at www.feldmanlawcenter.com or call 800-588-0425.

Greg Feldman
The Feldman Law Center

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Which is Better – Home Loan Modification Kit or Hiring a Loan Mod Company?

Literally 12 Million out of 75 million US Households are in trouble. They owe more than the actual worth of their house and this is US $ 700 Billion of negative equity. And to save these 12 million US Households, President Obama has announced the US $ 75 Billion of Package for modifying mortgage loans of the home owners. This is known as President Obama’s - Loan Modification – Making Home Affordable Program.

Now, the question is that, should you apply for the loan modification by yourself or hire a professional attorney or a loan mod company to do it for you? Well, let me tell you here that loan modification companies and attorneys are more prevalent in those states of USA which have reported the highest number of foreclosures such as Nevada, California, Arizona and Florida.

These loan modification companies will charge you literally thousands of dollars to prepare those documents and paperwork which you can prepare by yourself in less than 60 minutes if you have the right information about the process.

So in my opinion, you should download some good home loan modification kit from the internet and follow it’s step by step guide to prepare all the required documents for the loan modification process. But in any way, you should not pay literally thousands of dollars to the loan mod attorneys and companies. It is the wastage of your money.

And yes, there are lots of loan modification scams also. And if you need any assistance than simply visit Government’s Making Home Affordable Website. You can also call Homeowner’s HOPE Hotline – 888-995-HOPE(4673) for any assistance. Remember that Help is Free so do it by yourself rather than spending thousands of dollars behind so called loan mod experts.

Limbo and Home Loan Modifications by Feldman Law Center

Feldman Law Center – As the foreclosure backlog grows, a new class of American homeowners as described by a recent article in the Washington Post is growing by the month. These are homeowners that have fallen into a financial limbo where they are badly behind on payments, but their lenders have not yet foreclosed on the home. “I have even begged them for a foreclosure,” delinquent mortgage-holder Charlotte Jensen said. Behind on payments and not willing to wait for an eviction notice, she filed for bankruptcy, and left the home. Nearly a year later, still with no further payments, Bank of America has yet to take back the home.

The total of the backlog is estimated at one million borrowers, sits on top of the one million foreclosure actions that had been taken this year through May. It presents a major obstacle for any kind of rebound or stability in the country’s hard hit real estate markets. It’s also an obstacle than can drive the market lower and then keep it there indefinitely. Banks are currently doing the best they can not to flood the market with foreclosures but each sale, when one occurs, is counted as a “comp” for appraisal purposes. Everything similar gets indexed to the comp until the next sells at a lower price. For evidence of properties being kept off of the market one need only look at one of highest foreclosure states in the country. California had 111,000 foreclosed properties which could have gone to auction in May. Of that number, only 17,000 went to auction and only 2,000 sold. If those kinds of numbers repeat for just a few months, the state will have a backlog that will take years to unwind. Properties that aren’t sold on the way down would most likely be sold as prices stabilize or start to bounce back, which would mute any recovery.

“Lenders are having an immensely difficult time handling the capacity. They are torn between loan modification, short sales, foreclosures, and they are finding they can’t do all these things at once, and do them well, so we’re seeing a lot of things falling through the cracks,” said Howard Glaser, a housing industry consultant and a housing official during the Clinton administration.
Mortgage lenders and investors in that scenario would be looking at more losses as a result of the mortgage crisis. “It just means foreclosure rates are going to keep rising,” said Patrick Newport, an economist for IHS Global Insight. Without an end to the downward spiral in prices any kind of meaningful recovery in the economy will be impossible.

Another issue is the growing conflict of interest between mortgage investors and the companies that service the loans for them. In many cases, what is good for the servicers is bad for the investors and vice versa. For instance, in a home loan modification versus foreclosure situation, the servicer will favor the modification because it keeps payments and fees they can charge on them alive. The mortgage investors, seeing the potential for a decrease in cash flow as a result of the modification, will favor foreclosure as a means of getting their money out of the deal. The resulting stalemate can cause a house to sit in limbo while the servicers and lenders decide a course of action. For the homeowners in the situation, the stalemate can be beneficial as it allows them to stay in the house but the stress of knowing that an eviction can come at any time is tough to deal with.

While some of the backlog reflects the inability of lenders to keep up with the sheer volume of delinquent properties, another reason is an intentional slowdown in the pace of foreclosures as government and industry try to work with borrowers who want to stay in their homes. Fannie Mae and Freddie Mac, the government-run mortgage financing companies, put a temporary moratorium on foreclosures late last year, some states imposed moratoriums, and many of the country’s largest lenders voluntarily participated as well. The extra time gave lenders time to see how the guidelines of the Obama Administration’s “Making Home Affordable” would work and which borrowers could be helped by modifying their current mortgages under the plan. Many of those moratoriums started expiring at the end of the first quarter of this year, and foreclosures have been setting records on a monthly basis since then.
With potentially millions of foreclosed homes on the market and more coming every day, Prices have been hit across the country. The prices for existing homes fell another 16% in May versus the prices one year prior.  The growing backlog of homes in limbo indicates that foreclosure rates are likely to increase dramatically during the second half of this year and into 2010. Some estimates are calling for foreclosures to reach 2.4 million by year end. Bob Bellack, chairman of Zetabid, which auctions foreclosed properties, said “Prices will fall to the point where you have equilibrium, and it won’t reach that until there is no longer this foreclosure overhang.”  
Financial firms that carry mortgages or mortgage-backed securities on their books are scrambling to stem past and anticipated losses with any means possible. Whether a sign of desperation or not, mortgage investors have thrown their support behind  the Hope for Homeowners plan, a leftover from the Bush Administration which was considered an absolute flop the first time around. Intended to help over 400,000 homeowners at its outset, the plan originated only one loan. If the economy doesn’t turn, and without some sort of government assistance, continued foreclosures will result in continuing rounds of losses for investors.

Being in limbo has allowed some homeowners the time to save money while not making mortgage payments and take action through the home loan modification process to save their homes from foreclosure. In general, however, statistics don’t bode well for homeowners once they start missing payments. According to a March report from NeighborWorks America, a large housing counseling group, 60 percent of homeowners go into foreclosure after missing more than four payments.
Normal protocol is for the foreclosure process to start after the third payment has been missed but now it’s common for a foreclosure process to take nine months or more to get started, said Guy Cecala, publisher of Inside Mortgage Finance. “No one is in a rush, lender-wise, to deal with the property,” he said. “If you have to sell at a loss, why rush?”
Another protocol has lenders writing down the value of the home six months after an owner stops making payments, but the total loss is not recorded until the property is sold in foreclosure, said Mark Zandi, chief economist of Moody’s Economy.com. “Some may feel that the property is worth more than the market can bear at this time, and they are willing to wait until the market improves”, he said. “They don’t want to sell it into a completely depressed market.”

The typical foreclosure process varies by state and has been slowed down by the constant incoming volume. The timeline of the process is also dependent on who actually owns the mortgage and whether a bankruptcy has been filed by the homeowner. One of the biggest issues in the process now is that the phase preceding eviction, sale at auction, isn’t happening. Lenders, considering their workload and the costs of each foreclosure, aren’t eager to start a process which isn’t likely to be seen through to completion so limbo is the next best option.  
“During that period, where the property is in limbo, until there has been a sale of the property, the homeowner is still the owner, technically,” said John Rao of the National Consumer Law Center. Despite being seriously delinquent, homeowners can apply for a home loan modification to stay in their homes, even if they were turned down previously. Success after being turned down can be achieved if the homeowner has been hired into a new job, is generating more income, and/or by hiring legal representation to renegotiate the terms of the existing mortgage. The odds of approval are also increasing due to lenders’ reluctance toward taking more properties into foreclosure. Whatever they may have thought about home loan modifications before, at this point they’re a better option than either foreclosure or sitting in limbo.

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California and Nationwide Laws to Encourage Home Loan Modification

As of June 16th 2009, California’s Foreclosure Prevention law took effect.  This law says a bank can’t foreclose on a mortgage without trying to renegotiate the terms of the loan or giving three months notice to the homeowner.

This bill was passed in February, and is very much like President Obama’s HAMP (Home Affordable Modification Program) plan which began in March.  HAMP is a billion home loan modification initiative making it easier for homeowners to qualify for a home loan modification.  Both of these are designed to encourage banks to work with homeowners using payment plans or home loan modification.

“California is ground zero for foreclosures. We’re getting about 80 to 90,000 foreclosure filings every month. That’s one every 30 seconds, so until we start mitigating the number of foreclosures, our economic recovery is going to be hampered,” –Assemblyman Ted Lieu.  Author of the California Foreclosure Prevention law

What this means is that banks are going to need to attempt to work with homeowners through home loan modification.

Home loan Modification is when the bank agrees to a change in the terms of the mortgage.  These changes can include lowering the interest rate, and/or changing the rate from variable to fixed.  A lowering of initial principal of the loan, and an extension of the duration of the loan are also possible with a home loan modification.

If the lender doesn’t renegotiate the borrower still has 90 days until the bank can step in and seize the house.  This will allow the borrower a little time to think of an alternative such as negotiating a short sale with the bank, or consulting a professional home loan modification specialist.

A short sale is when the homeowner sells the house for less than its value, and the bank accepts the money and erases the rest of the debt.  Banks will sometimes do this because it is preferable to them owning a house it may take months to sell under in the current housing market.  (A market they helped to create incidentally, but that is another story.)

A home loan modification specialist is just what the name suggests.  A person or group who specializes in home loan modifications, and the laws and regulations surrounding them; who can help the homeowner  navigate their way though a home loan modification process.

Whatever approach you take to solving your foreclosure problem, it is important to act quickly.  Each day you delay is a day closer to losing your home, and no one wins in that situation.

To learn more about home loan modification visit Legal Loan Bailout.

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