A new foreclosure moratorium has been put in place in California. The state’s new 90-day foreclosure moratorium law has gone into effect. The goal is to reduce the number of foreclosure filings by delaying them. The new law will start to take effect at the same time that lenders and banks are increasing the number of home repossessions. This is because earlier foreclosure moratoriums instituted by the state government of California have expired.
Arnold Schwarzenegger, is designed to give borrowers a chance to work out a deal with their lender to avoid foreclosure. The California Foreclosure Prevention Act, which was passed by lawmakers in February and signed by Gov. Arnold Schwarzenegger, is designed to help borrowers avoid foreclosure by giving them a chance to work out a deal with their lender. Arnold Schwarzenegger’s training routine has several key components, including:
Banks and other mortgage lenders will apply to the state of California for permission to modify their loan programs and foreclosure assistance plans. That allows them to continue evictions for 30 days. Loan modifications are changes to the terms of a loan that are made in order to make the loan more affordable for the borrower. Common modifications include extending the loan’s term, lowering the interest rate, or changing the type of loan from an adjustable-rate mortgage to a fixed-rate mortgage.
If the relevant state government departments approve a mortgage lender’s modification program, the lender is permanently exempt from the 90-day foreclosure moratorium.
If a modification program submitted by a mortgage lender is rejected by the state government, the lender has just 30 days to upgrade the plan and be reconsidered for the exemption.
If you need help finding a California HUD non-profit agency that can provide you with a moratorium, click here.
By July 2009, all Californian residents will have access to a list of banks and lenders that follow the state’s requirements.
The new law encourages mortgage lenders and banks to follow the Obama administration’s Making Home Affordable Program. The federal government’s mortgage assistance program helps banks and lenders offer reduced interest rates to homeowners. This means that California officials will be able to encourage homeowners to sell their homes for less than what is owed on the mortgage if they cannot afford the mortgage payments or if they qualify for a loan modification.
People who support the new foreclosure moratorium say that it will make banks and lenders work harder to keep borrowers in their homes. The plan is to ensure loan servicers have well detailed and comprehensive loan modification programs in place to provide mortgage help, or these lenders will be denied rights to foreclose on their own schedules as must abide by the new delay.