SB 1137 will change the foreclosure numbers

With the recent enactment of SB 1137 in California we can expect a huge dip in Notice of Defaults and Notice of Sales over the next coupe months with a huge spike when the mortgage companies and their servicers get caught up with the notifications and timeline set within the Senate Bill.

 Here is a summary of the changes enacted in the bill.

SB 1137 became effective July 8th as an urgency measure. However, requirements pertaining to the notice of default and the posting and mailing of an entirely new notice will not become operative until 60 days after the effective date.

The provisions of the new law outlined below apply to loans secured by owner occupied residential real property and made between January 1, 2003 and December 31, 2007. These provisions will remain effective until January 1, 2013. The requirements are extensive and the full act text should be consulted for details.

A Notice of Default (NOD) may not be filed by the trustee or lender until 30 days after contact is made in person or by telephone with a borrower to assess their financial situation and explore options to avoid foreclosure, or until 30 day after satisfying specified due diligence requirements.

1. During the initial contact the borrower must be advised of the right to request a subsequent meeting. If a meeting is requested then it must be schedules with 14 days.
2. An assessment of the borrower's financial situation and discussion of options may occur at the first contact or at the subsequent meeting, but in either case the borrower must be provided a toll-free number for HUD certified housing counseling agencies.
3. A NOD must include a declaration that the borrower has been contacted or due diligence has been use to try to contact the borrower or that the borrower has surrender the property. Due diligence includes having a link to information on options to avoid foreclosure on the web site of the beneficiary or their agent.
4. If a NOD was filed prior to the effective date of the new law, without a subsequent notice of rescission, then a new declaration must be included as part of the notice of sale. The declaration must state that the borrower either was contacted to assess their financial situation and explore options to avoid foreclosure or that no contact occurred; in which case the efforts made to contact the borrower must be listed.
5. A NOD may be filed when a borrower has not been contacted as required by the new law if the failure to contact the borrower occurred despite the due diligence of the lender or their agent. The actions that constitute due diligence are listed in the new law.
6. A new notice has been created by the law and must be posted and mailed at the same time a notice of sale is posted. The notice advises residents that the property may be sold and that their right to continue to reside in the property may be affected, along with certain other information.

Requirements that do not have a delayed operative date include:

1. Maintenance of vacant foreclosed properties;
2. The amount of time which must now be given to tenants to vacant foreclosed properties.
3. The duties of loan servicers to maximize net present value under loan servicing agreements.

It's important to stay in tune with the changes in the market. Call Empire Realty for your next personal real estate consultation at (909) 579-6611, or visit us on the web at Empire Realty.

For information on purchasing your next home in Upland, Claremont, La Verne, Alta Loma, Rancho Cucamonga, Ontario, Fontana, Mira Loma, Corona, Chino, Chino Hills and Riverside or anywhere in the Inland Empire call Empire Realty at 909-579-6611 or visit us on the web at Empire Realty.

Empire Realty is your one stop shop for information and Full Service at a Discount.