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Foreclosures Down Thanks to California Law

Homeowner's Bill of Rights Brings Some Relief TO CA Residents Facing Foreclosure

Homeowner’s Bill of Rights Brings Some Relief TO CA Residents Facing Foreclosure

Orange County, CA – Across the nation foreclosures are down around 7% from last month according to Realty Trac. Default notices and bank repossessions were as low as 150,864 housing units through January. These were down from 162,511 in the month of December 2012. Foreclosure starts dropped also, with a difference of 11% showing between December 2012 and January 2013. Bank repossessions or REO’s came down by 5%, and have dropped a massive 24% from the year previous.

We have seen less activity in most states, and we can trace the causation of this decline to California, where a change in the law has meant a massive 39.5% reduction in filings within the last month. Remarkably, this is the first time since 2007 that California has not had the highest level of filings across the country.

Dubbed the ‘Homeowners Bill of Rights’,  the new law has changed things enormously in California. Principles from the national mortgage settlement rules have been applied to the state.

  1. Dual tracking is prohibited. This prevents lenders from foreclosing on a property while simultaneously being in discussion with the homeowner on a loan modification to save it.
  2. It guarantees Orange County residents and other Californians a single point of contact with knowledge of their loan and access to decision makers.
  3. It imposes fines up to $7,500 on fraudulently signed mortgage documents and allows homeowners to ask lenders to prove their right to foreclose.

These rules are now in place for every single mortgage provider operating in California. Thanks to this, the trend for foreclosure is on a rapid downward trajectory. However, a fair percentage of these foreclosures will resume as soon as lenders adjust to meet the requirements of the new law.

Florida picked up the top spot in foreclosures. Foreclosure levels rose again, on an annual basis for the eleventh time in just thirteen months. The percentage rise was roughly 20%, with a spike of 12% January from December.  Soaring away to around twice the national average, Florida saw one in three hundred properties experience a foreclosure filing during the month of January.

It’s not all bad news though, with decreases in foreclosures reported in thirty three different states. Massachusetts, Oregon, Delaware and Hawaii all reported excellent progress.

If you are concerned about the security of your own home, it’s always advisable to speak to a financial advisor to find out if there’s anything that can be done to improve your circumstances. A refinance without an appraisal may be an option for you. Our advice is always available, and we welcome any inquiries to help you to better understand your own position. Contact us today to find out more about what we can do to help you.

Scott Storace

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