On June 13th a new foreclosure rule was announced that has to do with  California Foreclosure Prevention Act, passed as Assembly Bill X2 7 by lawmakers in February and signed by Gov. Arnold Schwarzenegger.

The main points of this bill are:

• The law will largely press lenders to follow the Obama administration’s Making Home Affordable Program that began in March. That encourages lenders to cut interest rates or rewrite loans to 40-year terms to get payments below 38 percent of a borrower’s monthly income. Other options include reducing principal and tacking missed payments to the back of the loan. Under the law, California officials also can encourage short sales or deeds in lieu – options in which banks accept less than owed – for borrowers who want to leave or don’t qualify for modifications.
• adds 90 days to the foreclosure process for those banks that don’t comply with loan modification efforts

In summary, here’s what started on June 15th., 2009:

• Lenders will submit applications to the state outlining their loan modification programs. That gives them a 30-day exemption from a moratorium.

• If the state OKs a lender’s program, the firm is permanently exempt from the 90-day delay on foreclosures.

• If the state rejects the program as inadequate, a lender has 30 days to upgrade it and be reconsidered.

Consumers should be able to see a list of lenders that comply with the state’s requirements by mid-July.

For the full article from SacBee.com click here

New Foreclosure Timeline per new Civil Code:

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