Atty. Crispin Lozano

California Foreclosure Prevention Act update

Thursday, 09 July 2009 04:06 Atty. Crispin Lozano

Last May 21, 2009 the California Foreclosure Prevention Act was made effective. The act precludes the lender from filing a notice of sale for an additional 90 days unless the lender or servicer has a comprehensive loan modification program approved by the California Department of Corporations. If the comprehensive loan modification program is accepted by the regulators, then the applicant will receive an exemption from the 90 day foreclosure stay as long as the lender or servicer acts in accordance with the approved program. As of July 2, 2009, many lenders and servicers qualify under this exemption. This means that these lenders will not be giving another 90 days stay because they already have a program for loan modification.

The banks are now more receptive to negotiate loan modification. Last week we received offers from lenders reducing interest rate to 4 percent and forgiveness of the amount in arrears. In one of the offers we received, the lender made a second offer further reducing the monthly payments to cover payment for property tax and insurance.

Does your loan modification follow the Obama plan?

Wednesday, 01 July 2009 21:59 Atty. Crispin Lozano

Last week we received several offers of Loan Modification from different banks. Some are in compliance with the Obama plan while others are not. In one offer, we received a reduction in payment of about $1000 from the original mortgage payment. They based the new monthly payment on the gross income of the spouses multiplied by 31 percent. The resulting mortgage payment of $2,475 includes property tax and home insurance of $850.

The offer from another lender is a choice of three monthly payments which reduced the interest rate from 8.94 percent to 4 percent resulting in a reduction in monthly payment from $4,770 to $2,000 or a reduction of $2,770. The lender is not a participant in the Obama plan.

The right to redeem your home before Foreclosure Sale Date

Wednesday, 24 June 2009 22:55 Atty. Crispin Lozano

Last week, Mr. J of Alameda County came to our office and showed me a Trustee Sale (Foreclosure Sale Date) dated the following week. I asked Mr. J if he really wanted to keep his house and if he is willing to pay the amount of late payments. He said yes to both my questions so I immediately contacted the lender. After some negotiations, the lender agreed to stop the foreclosure provided the late payments are paid plus costs. Mr. J is happy to get back his home and started to secure the money from his retirement account to pay his late payments. This is an actual case and it illustrates the ability of the borrower to redeem his home by negotiating with the lender to pay all unpaid late payments plus costs.

Question: What is the law in California in redeeming property under foreclosure sale?

Answer: The California Civil Code Sec. 2924 gives the borrower the right to redeem his or her home within 90 days after a notice of default has been registered in the county recorder’s office by paying all late payments due plus cost.

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What can an Attorney do in negotiating Loan Modification?

Wednesday, 17 June 2009 22:49 Atty. Crispin Lozano

Question: What can an attorney do in negotiating loan modification for my mortgage?
Answer: Consider the following:
Negotiation from a position of strength is what an attorney can do for you. If you do it yourself, the lender will dictate the terms of modification to your disadvantage. In my ten years of experience negotiating personal injury and other cases, you could get what you negotiate only if the other party knows that you will win in Court. To request a reduction in principal, I always recommend a loan audit and appraisal report to prove that there are violations in the lending process and the value of the property has gone down to its current value.
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Loan Modification is best option to stop foreclosure

Wednesday, 10 June 2009 23:02 Atty. Crispin Lozano

Question: What is a loan modification?
Answer: Loan modification is a legal process whereby the terms of the mortgage contract are permanently changed to make payments more affordable to the borrower. Loan modification may include reducing the interest rate, extending the term of the loan from 30 to 40 years, or adding missed payments to loan balance. Modification may also involve reducing the principal balance of your mortgage by canceling or forgiving a portion of the mortgage debt.
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Help is available if you are late in payment of your mortgage

Wednesday, 03 June 2009 23:06 Atty. Crispin Lozano

Question: What is my best option if I am late in payment of my mortgage?
Answer: The best help available is loan modification. Under the Obama plan, you may request that your loan be modified so that your monthly payment will be equivalent to 31 percent of your net take home pay.
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Why hire an attorney to negotiate loan modification?

Thursday, 21 May 2009 05:23 Atty. Crispin Lozano

QUESTION: Why do I have to hire an attorney to negotiate loan modification when I can do it myself?
Answer: Consider the following:
Negotiation from a position of strength is what an attorney can do for you. If you do it yourself, the lender will dictate the terms of modification to your disadvantage. In my ten years of experience negotiating personal injury and other cases, you could get what you negotiate only if the other party knows that you will win in Court. To request a reduction in principal, I always recommend a loan audit and appraisal report to prove that there are violations in the lending process and the value of the property has gone down to its current value.
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California Foreclosure Prevention Act effective May 2009

Wednesday, 13 May 2009 22:20 Atty. Crispin Lozano

QUESTION: What are the benefits under the California Foreclosure Prevention Act (CFPA)?
Answer: The CFPA is a new law that may preclude a foreclosure sale for an additional 90 days beyond the current law requirements in order to allow the borrower and lender to pursue loan modification.
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Major banks signed up with Pres. Obama loan modification plan

Wednesday, 06 May 2009 22:15 Atty. Crispin Lozano

QUESTION: What major banks signed up for Pres. Obama Loan Modification Plan?
Answer: The Treasury Department announced the first six participants to sign up for President Obama’s plan. They include three of the nation’s largest banks: JPMorgan Chase, which will get up to $3.6 billion in subsidy and incentive payments; Wells Fargo, $2.9 billion; and Citigroup, $2 billion. The others are GMAC Mortgage, $633 million; Saxon Mortgage Services, $407 million; and Select Portfolio Servicing, $376 million. Additional loan servicers will be added to the list over time, a Treasury spokesman said.
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