New California Law Offers Free Living for Many Homeowners
On 2/20/09, Gov. Arnold Schwarzenegger signed into law a 90-day moratorium on California home foreclosures. The bill was introduced by Sen. Ellen Corbett (D-San Leandro) as an add-on to the California ‘budget’ package. It covers owner-occupied homes and first-mortgages made from 2003 to 2007. My first post about this was ‘New Law Extendeds California Home Foreclosures (again)‘ published on March 12, 2009.
However, state regulators can grant loan servicers and lenders exemptions, if they have a mortgage modification program in place that meets certain criteria. These include programs that defer a portion of the principal, lower interest rates for at least five years, or extend loan terms.
In 2008 the state of California extended the foreclosure process by apprx. 30 days by adding a requirement that lenders document their efforts to contact the delinquent homeowner.
So, now for 2009, the state of California has more than doubled (extending the normal California foreclosure by an additional 90 days. this is in addition to the 2008 30 day extension) the normal foreclosure time periods. Instead of helping (the state should stay out of the mortgage business) these actions are only prolonging the pain.
The market can’t recover until all these foreclosures get flushed through the system. Delaying the inevitable will not change the end result, it will probably only make it worse. In a declining market, the lenders will recover even less when the property eventually sells.
Personally, I’m not aware of one mortgage lender that starts the foreclosure process as soon as the homeowner is late one month. In the vast majority of cases, the lender does not start the process for four months or more.
So, now we have a number of California homeowners living (mortgage/tax/home insurance/HOA fee) cost free for easily a year or longer!
Who is really paying for this ‘free California living?’ With a lot of these toxic loans being purchased by the federal government, it’s the U.S. taxpayer who is paying.
Also, homeowner associations are in trouble because of the state’s legislated additional four month moratorium on foreclosures. With most San Diego monthly homeowner fees running over $250, who pays for the additional state mandated $1,000 in delinquent dues? It’s the existing association homeowners. HOAs now have to increase the dues, or require special assessments from the owners who are left. Once a property has been foreclosed, the lenders are responsible to pay the dues on those properties, but all outstanding balances prior to the foreclosure date gets wiped out! This HOA moratorium penalty is can be especially devastating for the many small (six to twelve units) condo developments like those which dominate the North Park/Normal Heights neighborhoods
So, let’s all give our California legislature shout out for another stupid idea put into law.
Trackbacks & Pingbacks
- California Homebuyers Tax Incentive Funds Depleted … Should We Increases Taxes and Fees to Pay More? | The Real Estate Professional
- California Homebuyers Tax Incentive Funds Depleted … Should We Increases Taxes and Fees to Pay More? | The Sacramento 10 - Top Ten Lists of the Best Restaurants, Businesses, Services, and Everything Else You Can Imagine in Sacramento, CA
- California Homebuyers Tax Incentive Funds Depleted … Should We Increases Taxes and Fees to Pay More? « All about California
- California Homebuyers Tax Incentive Funds Depleted … Should We Increases Taxes and Fees to Pay More? | My Real Estate Listings
- Home Default Video | San Diego real estate market blog
- California Homebuyers Tax Incentive Funds Depleted … Should We Increases Taxes and Fees to Pay More? | census record
- California Homebuyers Tax Incentive Funds Depleted … Should We Increases Taxes and Fees to Pay More? | Homes For Sale By Owner
- California Homebuyers Tax Incentive Funds Depleted … Should We Increases Taxes and Fees to Pay More? | Big Credit
- California Homebuyers Tax Incentive Funds Depleted … Should We Increases Taxes and Fees to Pay More? | COCHINPAGES
- California Homebuyers Tax Incentive Funds Depleted ? Should We Increases Taxes and Fees to Pay More? | California Forclosure Laws
- California Pallets | www.californiapallets.com
- California Pallet | www.californiapallet.com
- California Homebuyers Tax Incentive Funds Depleted ? Should We Increases Taxes and Fees to Pay More? | News From US
- California Homebuyers Tax Incentive Funds Depleted ? Should We Increases Taxes and Fees to Pay More? « Move out of California
- California Homebuyers Tax Incentive Funds Depleted ? Should We Increases Taxes and Fees to Pay More? | San Diego Home Loan
- California Homebuyers Tax Incentive Funds Depleted … Should We Increases Taxes and Fees to Pay More? |
- California Homebuyers Tax Incentive Funds Depleted ? Should We Increases Taxes and Fees to Pay More? | San Diego Refinancing
- California Homebuyers Tax Incentive Funds Depleted ? Should We Increases Taxes and Fees to Pay More? |
- California Homebuyers Tax Incentive Funds Depleted … Should We Increases Taxes and Fees to Pay More? | You dream travelhome--www.travelhomeonline1.com
- California Homebuyers Tax Incentive Funds Depleted … Should We Increases Taxes and Fees to Pay More?
- California Homebuyers Tax Incentive Funds Depleted ? Should We Increases Taxes and Fees to Pay More?
- Search engine optimization software
- San Antonio Divorce Lawyer
- California Homebuyers Tax Incentive Funds Depleted ? Should We Increases Taxes and Fees to Pay More?
- California Homebuyers Tax Incentive Funds Depleted ? Should We Increases Taxes and Fees to Pay More? | Cultures Online
- California Homebuyers Tax Incentive Funds Depleted … Should We Increases Taxes and Fees to Pay More? | Program Reviews with Gigantic Bonus Package
- California Homebuyers Tax Incentive Funds Depleted ? Should We Increases Taxes and Fees to Pay More? | All Informations
- California Homebuyers Tax Incentive Funds Depleted … Should We Increases Taxes and Fees to Pay More?
- Roxy Girls » Blog Archive » California Homebuyers Tax Incentive Funds Depleted ? Should We Increases Taxes and Fees to Pay More?
- California Homebuyers Tax Incentive Funds Depleted ? Should We Increases Taxes and Fees to Pay More? |
- Blog Archive » California Homebuyers Tax Incentive Funds Depleted ? Should We Increases Taxes and Fees to Pay More?
- California Homebuyers Tax Incentive Funds Depleted … Should We Increases Taxes and Fees to Pay More? | California
- San Diego defense attorney
- California Homebuyers Tax Incentive Funds Depleted … Should We Increases Taxes and Fees to Pay More? | All About California
- California Homebuyers Tax Incentive Funds Depleted … Should We Increases Taxes and Fees to Pay More? | California Los Angeles Movers
- California Homebuyers Tax Incentive Funds Depleted … Should We Increases Taxes and Fees to Pay More? | Taxes
- California Homebuyers Tax Incentive Funds Depleted ? Should We Increases Taxes and Fees to Pay More? | 100% MORTGAGES For FIRST TIME BUYERS
- California Homebuyers Tax Incentive Funds Depleted … Should We Increases Taxes and Fees to Pay More? | Universities in california
Comments are closed.
Homes take 18 months on average to work through the foreclosure process.. Imagine what foreclosures will look like 18 months from now!
Los Angeles lawyers
It’s sad, really sad, because the people that are losing these homes have names and faces. They could be your brother, your sister, and your parents. Most of the time, we tend to think that the foreclosures are mainly real estate investors or flippers that are just letting their investment properties go back to the bank, but the reality is there are a lot of families living without homes. Maybe this new law will give them some time to get their finances together…
San Diego cosmetic dentist