Asian Journal- The Filipino-American Community Newspaper

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.

Answer: You should start contacting an attorney to negotiate loan modification from the time you determined that your financial capacity cannot sustain your mortgage payment. Your mortgage payment including property tax and insurance should be at least 38 percent of your gross monthly income.

Answer: A Notice of Default is generally mailed as a certified mail. There are lenders that do not send the notice through certified mail. Generally it is printed in bold 14 point type with the wordings "Important notice: if your property is in foreclosure because you are behind in your payments, it may be sold without court action." It should state how much is due as of a certain date. If you are late in payments for about 3 to 6 months, a notice of default may be mailed to you. If you have any doubt on what you received you can check with an attorney. The NOD is filed with the County Recorder’s Office by the Trustee (usually a Title Company).

Answer: You may contact the lender or the County Recorder’s Office where your house is located to know if a Notice of Default has been filed. All parties in the mortgage contract should be sent a copy of the NOD. If you are not sure of what papers you received, you may contact an attorney.