California Modification Law Goes Into Effect

Posted by Orb Staff on June 15, 2009 No Comments
Categories : Mortgage Servicing

lifornia Foreclosure Prevention Act, which Gov. Arnold Schwarzeneggar signed into law in February, has officially gone into effect, meaning that servicers with ‘incomprehensive’ loan modification programs will face a 90-day foreclosure moratorium. The [link=][u]law[/u][/link] attempts to ensure quality loan modifications, and the guidelines closely follow the parameters laid out by the Treasury's program and the Federal Deposit Insurance Corp.'s modification program before it. In March, Schwarzeneggar said the act "rewards lenders that have robust modification programs" in place by excluding them from the 90-day delay. Most large-scale shops will not have problems complying, California Mortgage Bankers Association spokesperson Dustin Hobbs told [link=][u]The Sacramento Bee[/u][/link]. "They have already complied with similar requirements at the federal level,’ he said. While servicers hit with the 90-day moratorium will have more time to negotiate with borrowers, multiple moratoria imposed late last year and early this year appeared to have only delayed the inevitable: Once the majority of foreclosure halts ended, foreclosure rates shot up to record highs. SOURCE: The Sacrame

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