California has been severely affected by the housing crisis. A recent study by Core Logic showed the state has been in the top five for completed foreclosure for the past months. But soon residents in the state may get added protections to prevent foreclosure.
Attorney General Kamal Harris introduced legislation which would ban “dual tracking,” a method employed by large banks where one arm of the bank considers foreclosure alternatives while another arm initiates the foreclosure process. Some lawmakers believe banks should have been doing this all along. Banks actually agreed to this as a temporary measure of the national foreclosure settlement but have resisted the notion that would become law in California.
Offering alternatives to foreclosure, such as a mortgage modification, are often less-expensive than repossessing a home. Mortgage modifications are preferred by homeowners, and can be more easily negotiated by a foreclosure attorney. Should the law pass, mortgage lenders would be required to inform homeowners of the alternatives to foreclosure and respond in writing to a borrower’s application before beginning foreclosure. Banks assert the policy would delay foreclosure for people who are ineligible for an alternative. Lawmakers insist that even under the new law foreclosures would move more quickly than they do now.
Even though foreclosures have been big news for some time, many homeowners are still unaware that they can stop foreclosure through many different means until they get the advice of a foreclosure lawyer.
Alternatives to foreclosure include short sales, loan modification and in some cases bankruptcy, but the homeowner must be qualify. A foreclosure attorney can evaluate a homeowner’s situation and determine which prevention measure is their right choice.