Update -- June 2009

California 90 Day Moratorium on Foreclosures

On June 15, 2009, California extended the home foreclosure process by 90 days except when a loan servicer obtains an exemption. In order to obtain an exemption, the mortgage servicer must demonstrate to the State that they offer a comprehensive loan modification program to the borrower. The Department of Corporations has posted a frequently asked questions webpage.

The California Banker’s Association recommends that you call your lender if you are having problems with your mortgage. There has been some frustration over the fact that some lenders will not negotiate with homeowners until they are in default. Many homeowners looking to refinance are finding that their home values are lower than their current loan amounts. Others who are struggling to make their monthly payments and are looking to modify their loans may have lost their jobs or had their hours reduced.

About Foreclosures

California, as well as the nation, is in the midst of one of the worst economic crises since the Great Depression. As unemployment rises above 11 percent within the State, more and more homeowners are having difficulty making their mortgage payments. That difficulty is compounded by certain mortgage products that, pursuant to their design, result in a substantial increase in payment after several years. As a result of those and other factors, many homeowners now face payments beyond the level of what they can afford.

The above issues are compounded by a significant decline in property values, which has left many California homeowners owing more on their mortgages than their homes are worth. Regardless of the initial cause of the default on a loan, the resulting foreclosure has significant impacts upon the surrounding home values, community, and for those with a financial interest in the loan itself.

To help those seeking foreclosure help, the California Senate Majority Caucus has compiled a list of helpful resources to get answers for your homeowner questions.

This website also has several tips for avoiding scams that have begun to torment vulnerable homeowners, as well as numbers to call if you believe you were a victim to crime.

You can also view recent legislation that your elected Majority Caucus Senators have been working on to aid homeowners in this economy by clicking the ‘legislation’ tab in the sidebar.