Governor of CA Signs New Foreclosure Mortgage Bill

By
Real Estate Agent with Lyon Real Estate BRE #00697006

Senate Bill 1137, the so-called foreclosure mortgage bill, sponsored by Senate president pro tem Don Perata, was signed into law today by Governor Arnold Schwarzenegger.

Among some of its provisions, lenders can no longer automatically foreclose on sellers who fall behind on their payments. Under the new law, lenders are required to either first call the home owner or meet in person with the home owner to discuss options for avoiding foreclosure.

Also, tenants can now have 60 days (instead of 30 days) to move out of the property after the home has been taken back by the bank.

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Elizabeth Weintraub is an author, home buying expert for About.com, a Land Park resident, and a veteran real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento, as well as tract homes in Elk Grove, Natomas, Roseville and Lincoln. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout the four-county Sacramento area with an emphasis on Elk Grove. Call Elizabeth Weintraub at 916.233.6759. Put 40 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. BRE License # 00697006.

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Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate. Disclaimer: If this post contains a listing, information is deemed reliable as of the date it was written. After that date, the listing may be sold, listed by another brokerage, canceled, pending or taken temporarily off the market, and the price could change without notice; it could blow up, explode or vanish. To find out the present status of any listing, please go to elizabethweintraub.com.

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Ambassador
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Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Elizabeth, at least it is a little relief in a compromise between lender and homeowner. The 60 days gives the family some more breathing room.

Jul 08, 2008 05:55 PM #1
Ambassador
567,946
C Tann-Starr
Tann Starr & Associates, Inc. - Flushing, NY

Elizabeth, anything that can help owners turn themselves around financially is a thumbs up in my book. I'm just feeling cautious about being too positive, for there always seems to be unintended consequences with new laws. They never catch everything on the first sitting. I hope this works out for people who need help. Thank you for the update. Looking forward to learning more about this. Enjoy your evening. Regards, C.

Jul 08, 2008 05:56 PM #2
Rainmaker
126,474
Kevin O'Shea
Coldwell Banker - White Plains, NY
White Plains, NY Real Estate

Hi Elizabeth,

I hope it helps some people.  It is really a mess out there.


Good luck!

Jul 08, 2008 06:00 PM #3
Rainmaker
412,348
Mesa, Arizona Real Estate Mesa Arizona Realtor
Teri Ellis at Homes Arizona Real Estate LLC - Mesa, AZ

Elizabeth, it sounds good/and not so good. Depending on the situation. I think the lenders - typically - should try and work with the homeowner.....investors? What is your take on this? ;-) I KNOW you have one. ;-)

Pepper

Jul 08, 2008 07:27 PM #4
Rainmaker
251,837
Robert Machado
HomePointe Property Management, CRMC - Sacramento, CA
CPM MPM - Property Manager and Property Management - Sacramento Area

The sixty day notice for tenants makes sense as it now matches up with California's Landlord Tenant Law.  I know a lot of tenants are getting kicked out of the home they rent.

Jul 09, 2008 12:16 AM #5
Rainer
256,188
Debi Ernst
St. Charles County, Missouri - Prudential Alliance Realtors - O'Fallon, MO
GRI, e-PRO, Broker/Sales Associate

I hope this will stop more forecosures from happening.  You'd think that if the bank just talks to the borrower, they might be able to work something out.  We'll see what happens...  :)

Jul 09, 2008 12:50 PM #6
Rainmaker
1,242,355
Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents
Lyon Real Estate - Sacramento, CA
Put 40 years of experience to work for you

Hi Gary: I don't know if it will actually provide any relief for a homeowner.

Hi C: There are always other reasons why bills are passed.

Hi Kevin: I suppose it has intentions of helping people.

Hi Teri: Well, my take is lenders already try to contact borrowers when payments are made. They have a collection department to do that. And there is the HOPE NOW initiative. I suspect this bill will help a small portion of people. For example, the bank can't file foreclosure for 30 days. But most of them file after two or three months have passed since the last payment -- some banks take even longer to initiate foreclosure.

On the other hand, a seller who has a tenant in the property is now required to give that tenant 60 days to move. So if you're negotiating a short sale, for example, by the time you get approval to close, it's generally two weeks to 30 days before closing. Nobody wants to get an updated short sale letter. They want to close. Which means a new buyer will get stuck with the existing tenant.

Hi Robert: I don't know why more lenders aren't exercising the assignment of rents provision in the deed of trust. Do you? They have the right to step in and collect the rent when the owner goes into default.

Hi Debi: From what my clients tell me, many banks aren't cooperating with them.

elizabeth weintraub sacramento real estate agent

Jul 09, 2008 01:03 PM #7
Rainmaker
25,713
Jim Quinn
Century 21 - Anaheim, CA
North Orange County Real Estate

Elizabeth, any help is a good help these days. Hopefully, with assistance from all angles it will help to jumpstart the market back in the right direction again.

Jul 12, 2008 01:13 PM #8
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