Brentwood Press - Index

Brentwood Press - DiscoveryBayPress_08.15.08 - Index

20A | THEPRESS.NET AUGUST 15, 2008
Real Law
By Jim Price
STATE WANTS LENDERS TO OFFER
LOAN MODIFICATIONS UNDER NEW LAW
Up to now, anyone who has tried to
contact their lender to attempt to modify
their loan quickly found this was an exercise
in futility. You would get tangled in
an automated phone system, and the only
person you were able to talk to was at a call
center outside the United States.
The State recognized the lack of communication
exhibited by lenders when it
recently enacted Civil Code Sections 2923.5
and 2923.6. Now, a lender can not start
foreclosure on a home until 30 days after
it has contacted or tried with due diligence
to contact the homeowner. Lenders must
first try to contact the owner by first class
mail. If that is not successful, lenders must
attempt to make contact by telephone at
least three times. If the owner does not
respond within two weeks, the lender must
send a certified letter. Finally, lenders must
provide a toll free telephone number to a
live person during business hours.
Under the new law the State
Legislature has declared that a loan servicer
acts in the best interest of all parties
if it agrees to a loan modification with a
net present value in excess of the anticipated
recovery through foreclosure, and it
is the intent in Civil Code Section 2923.6
that lenders offer loan modifications to
borrowers.
This new law offers real opportunities
to owners who want to save their homes. In
the past, the only modification you could
hope to negotiate was a reduction in the
interest rate and monthly payments for a
few years. Now, the amount you owe on the
house, or principal, is up for negotiation.
If you have questions on this or any
other real estate law topic call me at (925)
516-4686 to set up a consultation.
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