manageable for beneficiaries, loan servicers and trustees.
Why was this such an emergency for legislators?
1. unprecendented number of foreclosures affecting CA economy
2. adverse affect on housing prices which leads to lower property tax revenues
3. feel lenders are contacting problematic borrowers
What is covered? All loans made from Jan 1, 2003 to Dec 31, 2007,
where loans are secured by residential real property and are
owner-occupied.
Preconditions to recording notice of default:
- contact is made as required by SB 1137 or
- 30 days after satisfying the due diligence requirements
Contact with the borrower:
- contact the borrower in person or by telephone
- assess the borrower financial situation
- explore options
If you tried contact on 3 separate times in 3 separate days with no
response within 2 weeks, you must send a certified letter.
On Website:
- toll-free number on website
- toll-free number made available by HUD to find a HUD certified
housing counseling agency
- options that may be available to borrowers who can't afford their mortgage
- list of financial documents borrowers should collect and be prepared
to present to the beneficiary or authorized agent
When an NOD recorded on or after 9/8/08, must contain a declaration of
compliance with civil code ลก 2923.5
At the end of the day this new bill will affect those only who run a
loose ship and not servicing correctly. Those NextGEN lenders who are
lending for the right reasons, who really want to see the borrower
perform on their loan and is willing to workout arrangements with the
borrower, will not be all that impacted. Hopefully, they may even see
their delinquencies decrease due implementing SB 1137.
Lenders/Servicers have 60 days to implement this.
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2 comments:
At the end of the day, I feel that this bill will not do its job properly, as I believe that most attempts of contact with distressed homeowners will go unanswered. There has been enough media buzz about short sales and loan modifications for any borrower to get help before it is too late.
The issue that still remains will the lender workout departments and the overall lack of cooperation with acceptable options.
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