June 15, 2009
State Foreclosre Moratorium Starts Today
Some California homeowners facing foreclosure will get a break over the next three months. Governor Arnold Schwarzenegger has signed legislation enforcing a 90-day moratorium on foreclosures. The law is effective starting today.
The bill also requires lenders to prove they have comprehensive loan modification programs in place.
The bill. known as X2 7, aims to convince lenders to work towards keeping borrowers in their homes as they try to renegotiate home loans. It is modeled on the federal home affordabiltity program that began in the spring. That program encourages lenders to cut interest rates or rewrite loans to 40-year terms to get payments below 38 percent of a borrower's monthly income.
The bill also requires lenders to prove they have comprehensive loan modification programs in place – or else the lenders will not be allowed to foreclose on their own timetable; rather they would have to follow the 90-day state guideline.
The bill states that lenders in the state cannot foreclose a mortgage without attempting to renegotiate the loan, or else giving the homeowner three month's notice.
Real estate analysts say the action will only delay most foreclosures, and that California, which has been the nation's epicenter of the housing crisis, will still face an onslaught of foreclosures as the last of the adjustable rate mortgages taken out in 2005 through 2007 reset to higher interest rates.
Imperial county has been hit hard by foreclosures, but several real estate professionals here say the drop in pricing has created a rush, and that pending and contingent sales numbers are on the rise.
For the latest numbers on Imperial county foreclosures, click HERE
The bill also requires lenders to prove they have comprehensive loan modification programs in place.
The bill. known as X2 7, aims to convince lenders to work towards keeping borrowers in their homes as they try to renegotiate home loans. It is modeled on the federal home affordabiltity program that began in the spring. That program encourages lenders to cut interest rates or rewrite loans to 40-year terms to get payments below 38 percent of a borrower's monthly income.
The bill also requires lenders to prove they have comprehensive loan modification programs in place – or else the lenders will not be allowed to foreclose on their own timetable; rather they would have to follow the 90-day state guideline.
The bill states that lenders in the state cannot foreclose a mortgage without attempting to renegotiate the loan, or else giving the homeowner three month's notice.
Real estate analysts say the action will only delay most foreclosures, and that California, which has been the nation's epicenter of the housing crisis, will still face an onslaught of foreclosures as the last of the adjustable rate mortgages taken out in 2005 through 2007 reset to higher interest rates.
Imperial county has been hit hard by foreclosures, but several real estate professionals here say the drop in pricing has created a rush, and that pending and contingent sales numbers are on the rise.
For the latest numbers on Imperial county foreclosures, click HERE