CA’s Foreclosure Moratorium a Sham… We’ve Been Lied To By Our State Government
Well, thanks to one of my loyal and eternally vigilant readers, Mandelman Matters has learned that California’s 90-day moratorium on foreclosures, which had the potential to be almost meaningless… well, as it turns out is actually much less than meaningless… it’s a sham.
Apparently, almost all of the lenders and servicers who were ostensibly not to be allowed to foreclose on homes during the 90-day period made possible by the moratorium on foreclosures passed by the legislature about a week ago, were able to get exemptions to the moratorium and did so BEFORE the foreclosure moratorium bill even passed the legislature! The exempted lenders and servicers don’t have to modify or prove they tried to modify a single mortgage before foreclosing on properties in California. In other words, nothing changed… essentially nothing… nada… not a thing.
Of course, what bothers me about this isn’t that the foreclosure moratorium won’t be effective, or that it won’t accomplish what it was supposed to accomplish… it never had a chance to accomplish much of anything anyway, which is why I chose to make fun of it in my article about how it’s purpose was to allow surfers to spend more time surfing summer breaks.
The point that offends me deeply is that our state government… and by state government I mean you, Arnold, flat out lied to us. And although I’ve come to expect that from many politicians, I don’t expect it from the Viennese weightlifter who is running things in Sacramento.
So, just so we’re all on the same page here…
Our state government announced that the legislature had passed a 90-day moratorium on foreclosures, saying that it would give people time to obtain loan modifications and the like. But, they also knew that something like 90% of all lenders and servicers in California had already applied for and received exemptions to the rule, effectively rendering the moratorium moot.
Are you kidding me? Did you guys really do this? Unbelievable. How dare you… Do you have no sense of what people are contending with out here in reality land. No, it’s all too obvious that you do not. You should be ashamed.
Here’s the link to the firms that are exempt from the California Foreclosure Moratorium: http://www.corp.ca.gov/FSD/CFP/pdf/ExemptList.pdf
This really is unbelievable. So... is it just incompetence, or intentional deception. Because those are the only two choices here, right?
Mandelman,
Once again you have hit it right on the head. The problem is, you keep screaming, and no one is litenting who can change things.
I repeat, the ONLY real solution to this, and many similiar political and corporate log jams, is a single voice web site whereby 20-50 million viewers nationwide, collectively agree via periodic online balloting, to boycott, minimize, or flat out mutiny against the power groups who continue to take advantage of consumers and taxpayers, with absolutley no ramifications. Where does it end, or even change slightly to the benefit of home owners, small business people, and taxpayers. Who has the guts to really stand up and go toe to toe? Aarone Krowne has tried, at great time and expense. It takes a courageous, outspoken, savvy, person to lead the charge. Any takers?
Once again you have hit it right on the head. The problem is, you keep screaming, and no one is litenting who can change things.
I repeat, the ONLY real solution to this, and many similiar political and corporate log jams, is a single voice web site whereby 20-50 million viewers nationwide, collectively agree via periodic online balloting, to boycott, minimize, or flat out mutiny against the power groups who continue to take advantage of consumers and taxpayers, with absolutley no ramifications. Where does it end, or even change slightly to the benefit of home owners, small business people, and taxpayers. Who has the guts to really stand up and go toe to toe? Aarone Krowne has tried, at great time and expense. It takes a courageous, outspoken, savvy, person to lead the charge. Any takers?
davevw...
You just described my strategic plan... exactly what I'm here to accomplish. It's Mr. Smith Goes to Washington on steroids to the 10th power. It's time to take this country back... to let our elected representatives know that we're paying attention going forward and that we care deeply about our nation's future.
Someone does need to restore our participatory democracy... to leave out the fringe politics that divide us in favor of the core issues that hold us together and make us the land of opportunity where anything is possible. Someone who's not driven to maximize the individual's return, but rather who's dedicated to competitive fairness.
My goal in life is to change how our president gets elected... from the way it is today, where we elect the best fundraiser, to the way it once was... when presidents served the people. I want everyone to feel like they can make a difference... and that they always could.
Who's with me? Torch or pitchfork?
I want sticks...9 trillion sticks!
YES! Are you in? I'm so serious about the new movement: People in Favor of Hitting Politicians With Sticks.
I'm think of doing a national tour. Seriously. Some people called me from Arizona and said they could pack the room if I'd come speak. I'm thinking... YES!
Smoke and mirrors - it sounded good in the paper and in small print - the list of lenders that are exempt will be published at a later date. Everyone should know by this time WHO runs this country and it isn't the President, he is just the front man that smiles and and tells jokes (and I voted for the guy). I would love to think sticks would work, the problem we can't get to the people who really need it. You are on the right track but the train goes into a REALLY dark tunnel. Keep up the good work, I will show up to protest with a few sticks and if we make enough noise it might just make them a little uncomfortable, unfortunately they know where to hide.
Oh ye of little faith. I will find where they are and we will come at them with sticks. And they will fear us. We will wave our sticks... we will bang our sticks... sticks, ah yes... sticks. (Insert evil laugh.)
The above comments represent a HUGE misunderstanding. The exempt lenders are exempt because they have complied with the law and submitted a plan to offer modifications. That means they MUST offer modifications to borrowers who qualify (e.g. the 38/31% FDIC standard).
The law was designed to pressure lenders to offer modifications. The exemption list means it is doing exactly that.
Also, the law- even for non-exempt lenders - is NOT a moratorium. It does not stop or delay pre-foreclosure notices or Notice of Default filings. It may delay filing of Notices of Sale only. The media's continued use of the term "moratorium" gives borrowers a false sense of security.
BTW, Martin, excellent article in NR on banks' responsibility.
i posted the list of exemptions here to da MadMan.. [gotta luv that moniker...hey mm?]
if you have ever had to deal or negotiate a loan mod with a servicer or lender [ 99.99% of the time they dictate terms not negotiate, at least not without the threat of litigation ] this has all been a sad cruel joke!
california being a "non-judicial foreclosure state is instrumental" in the sub-prime robbery taking place - the payoff is the double dip payment to the banksters.
NO loan modification ever has to be made to get the exemption... are you reading? the key term in the statue is " have in place a program"
not evaluate , not consider, not negotiate, not modify 1 single loan!
nothing that will reduce any profit for the usury coined
[mortgage industry] why would they??? think! It is against every principle of the financial industry PERIOD!
fwiw- the mortgage meltdown was no byproduct it was all planned & orchestrated to a tee.
the ultimate perfection of greed & death by fees!
Freak's reply misses the big picture. Yes, to qualify for the exemption the lender needs to have the program in place. But if there is a program and the lender fails to follow it, the borrower could sue the lender and not only force a modification, but also recover attorney's fees and possibly punitive damages, as well. Alternatively, the borrower could go into bankruptcy and show the judge the lender's failure to comply. Finally, the lender's willful non-compliance with it own program will likely trigger regulatory sanctions.
The claim of lenders dictating terms is similarly inaccurate. Increasingly, lenders are closely following models such as FDIC/Obama. Moreover, where there are errors in the calculations (e.g. wrong income or value), lenders are correcting the errors and sending back better mods for my clients. Of course, the key is that borrowers need to have competent advisors to hold the lenders feet to the fire. Hence, the lender campaign to limit the availability of borrower advisors, such as SB 94.
i respectfully disagree...
1st and foremost..
if your loan has securitized , 99% of sub prime & alt-a loans from 2004-2008 were securitized.
you will never talk to the lender.. period.
a servicer yes...the org lender...no. never..its a trust and or pool of investers... no talking head attached !
but thats not the point..
you will need to show me 1 single case where any court has fined
or found on behalf of the borrower and therefore changed the $$ amount
to reflect relief for the borrower.
please.
bill i take it by " your clients"you are a lawyer?
Don't know figures for subprime (I did so little), but many alt-A remained in portfolio, e.g. at Lehman, Citi, WaMu. Whatever portion was securitized, it was not 99%. But you are correct that securitized loans are more difficult to mod. Some servicers (e.g. Litton) are better than others.
SB 7 just went into effect in CA in June. Too soon to have any borrowers wrongfully denied mods, gone to trial and verdict, let alone any appellate decisions. They will come. However, both the legal and mortgage media have documented thousand of borrowers who have won against lenders on a wide variety of grounds; e.g. lost note, TIL/RESPA violations, fraud, etc. Bankruptcy cases have also seen billions in principal reductions. Outside of bankruptcy, civil judgment remedies won't necessarily involve reduction of principal. But if you get a judgment that invalidates a deed of trust (but no principal reduction), how much do you think the lender would accept for a debt that is no longer secured?
The bottom line is that things are moving in the borrowers' favor. That should only be helped by today's announcement that the IndyMac mods are seeing only a 16% re-default rate. Last question - yup. Have to sign off for good now; too many borrowers to help.