90 day foreclosure moratorium of little effect
Thursday, June 18, 2009
California’s new 90 day foreclosure moratorium may have little effect.
It was created as an incentive for lenders to establish comprehensive loan modification programs. Once the lender has this in place, they can be exempt from this requirement!
Here is more from the California Association of Realtors:
Q 83. What, in a nutshell, is the new law extending the foreclosure process by 90 days?
A Under the new California Foreclosure Prevention Act, lenders foreclosing on certain loans are prohibited from giving a notice of sale until the lapse of at least 3 months plus 90 days after the filing of the notice of default (see Question 88). A loan servicer can obtain an exemption from this requirement by demonstrating that it has a comprehensive loan modification program.
Q 84. What is the purpose of this law?
A The purpose of this law is to try to stem the tide of foreclosures and their adverse consequences by providing additional time for lenders to work out loan modifications with borrowers as well as creating an incentive for lenders to establish comprehensive loan modification programs
With the new programs the lenders will look for alternatives to foreclosure, such as work outs and short sales.
