New California Law Will Only Delay Foreclosure – S.B. 1137

Photo courtesy of the California Governor’s office

Tuesday, in another effort to protect homeowners facing foreclosure, California Gov. Arnold Schwarzenegger signed bill S.B. 1137 into law. This law would only delay the foreclosure process in hopes that lenders will talk with homeowners before taking a final decision to foreclose on the property.

This new law has certain restrictions just like previous other efforts made by the Gov. Schwarzenegger and President Bush to prevent foreclosures.

Previously, Gov. Schwarzenegger reached a deal with four major subprime lenders to freeze adjustable interest rates for troubled homeowners and the U.S. President introduced a program with six of the largest mortgage lenders to delay the foreclosure process for an additional 30-days giving homeowners extra needed time to work out a repayment plan.

With the Gov. Schwarzenegger’s signature, this law will require lenders to do the following:

Contact troubled borrowers with loans obtained between 2003 through 2007 and explore various options to avoid foreclosure. Lenders will have to contact them at least a month before they begin the foreclosure process marked by the recording of a “notice of default.” It is never advisable for homeowners to ignore phone calls and/or notices coming from your current lender and with the passing of this law, homeowners will have the responsibility not to ignore them. “Don’t run away when someone reaches out to you. This is a great opportunity, take advantage of this opportunity,” said the Governor.
Notify, in six different languages, tenants currently residing in foreclosed properties once a notice of sale has been posted on the property. Tenants will have 60-days (before it was only 30-days) to vacate the property before they are evicted.
Maintain the physical appearance of vacant properties to prevent crime and neighborhood blight. Cities will be allowed to impose $1,000 fines each day the upkeep of a vacant home has been neglected that will include for excessive foliage growth, trespassers/squatters or prevention of mosquito breeding. This will help prevent vacant homes from affecting negatively the neighborhoods property values.

“Many factors contribute to the mortgage crisis, so there’s no single solution, but this bipartisan legislation gives struggling homeowners one more tool,” said Schwarzenegger.

Senate President Pro Tem Don Perata, D-Oakland, who authored SB 1137, said “What we needed is to make sure that the people who were being foreclosed upon had a shot at talking to the people holding the note. This allows for a conversation, requires a conversation between the two parties of interest. And hopefully they can work something out.”

Quotes from the San Francisco Chronicle “Law Helps Struggling Homeowners”

View a Video Blog where Rosario Marin, Secretary State and Consumer Services Agency, briefly explains about the signing of S.B. 1137

Comments

6 Responses to “New California Law Will Only Delay Foreclosure – S.B. 1137”

Janet on September 29th, 2009 3:05 PM

the fines are a little ridiculous. people can’t pay their mortgage but they’re going to pay a $1,000 dollar fine?!
Ney on September 30th, 2009 7:35 AM

Janet,

The $1,000 fine is imposed on the lenders not the homeowner.
Janet on September 30th, 2009 3:33 PM

duh! read slower janet! ha! thx ney
Yamen Elasadi on October 24th, 2009 2:35 PM

There are different alternatives to delay the foreclosure auction/sale date!
Did you know that Homeowners are illegally being foreclosed on especially in Trustee States?

If you are a homeowner with a Notice of Sale, 3 Day Notice to Vacate, or received the Unlawful Detainer and/or a realtor that is trying to help facilitate a short sale or a loan modification I can help you delay that sale/auction date. I can help you with the eviction delay.

It is well known that banks are illegally foreclosing on homeowners in Trustee States such as California, Arizona, and Nevada since the foreclosure process is lightly monitored by government agencies.

In Judicial Foreclosure states, a judge reviews the legality of the foreclosure proceedings to ensure the homeowner is being protected against greedy lenders and yet still the lenders are not properly following the foreclosure laws correctly (see this article: http://www.nytimes.com/2009/08/31/nyregion/31judge.html?_r=2).

In Trustee States, lenders employ a “third party” trustee company to replace the legal function of a judge and orchestrate the foreclosure process. If banks are not legally foreclosing when they know a judge reviews the case what do you think they are doing when they only have to go through a trustee that they pay? And what is more interesting, the trustee company is liable for the foreclosure proceedings but who is going after the trustee companies to review the legality of these foreclosure packages? You guess it! Yes, No one is..!

Filing bankruptcy is not the best option for you. It sure helps delaying your foreclosure for 30-45 days but once your bank files a motion to lift the stay they can proceed with the debt collection therefore foreclosing on your home. You will end up losing your home and with a bankruptcy on your credit history.
I hope this helps!

We offer different foreclosure delay tactics, credit repair and loan re-write program. To find out more about our services you may want to visit [COMMENT EDITED]

Yamen Elasadi
yamen@ [COMMENT EDITED]
nancy butler on December 18th, 2009 11:56 AM

under new law,,,does a private lender, need a real estate license,,to financial & carry the contract?
Ney on December 22nd, 2009 3:00 PM

Nancy Butler,

Your question is somewhat confusing. Please rephrase it.