FORECLOSURE DEFENSE NEWS AND INFORMATION - California

Loan modification is a process that involves changing the terms of the existing mortgage to make it easier for the borrower to make payments on time without unnecessary hardship. Loan modification sometimes allows the borrower to make smaller monthly payments or pay the loan back over a longer period of time - which also results in lower monthly payments. A loan modification can even mean that the lender agrees to forgive missed payments or reduce the total amount of the principle or outstanding balance owed on the mortgage.

As part of his strategy to attack the foreclosure crisis, President Obama launched the Home Affordable Modification Program. Under the new initiative, millions of borrowers who are current on their payments but are afraid of falling behind - and millions who have already missed one or more payments - may be eligible for a loan modification that reworks the terms of the original loan to make it more manageable.

In many areas of California, the dramatic depreciation of real estate prices has made loan modification a win-win situation for homeowners and banks alike. The situation is likely to become even more acute in the near future. This suggests that homeowners would benefit from acting quickly in requesting that their lender or loan servicer consider various loan modification options, such as reducing monthly payments and/or the outstanding balance of loans.

This week, the Desert Sun Wire Service reported that the corridor between Perris and Rancho California, and the nearby Moreno Valley area, are poised for a second wave of homeowners to walk away from upside-down condos and houses. In February, the last month for which figures are available, a record 1,550 homes in southwest Riverside County entered the foreclosure process, up from 1,441 foreclosures in January. Since January 20, 2009 at least 16,000 homes in southwest Riverside County have fallen into foreclosure, according to several real estate tracking companies. Comparable situations exist in other parts of California.

While loan modifications offer considerable benefits to homeowners who are facing difficulties making their payments, a number of fraudulent businesses which call themselves "loan modification specialists" are taking advantage of homeowners. CBS News recently reported that these scam are particularly prevalent in states such as California and Nevada, which have particularly high foreclosure rates.

The answer for homeowners seeking modification is surprisingly straightforward: submit a loan modification request directly to the lender, without paying thousands of dollars to attorneys or loan specialists. Mortgage modification forms are inexpensive, and are available via direct download. Lenders, homeowners and communities all benefit from loan modifications, which frequently give homeowners the opportunities to remain in homes that would otherwise have become vacant properties.

Because California is a non-judicial foreclosure state, our most popular form for California residents is our California Complaint to Stop Foreclosure (with demand for injunctive and declaratory relief). The following information is intended to hel0p you understand why a California Complaint to Stop Foreclosure is essential:

What is "non-judicial foreclosure"? This type of foreclosure does not involve court action. When the deed of trust is initially signed, it typically will have a provision called a "power of sale clause," which allows a trustee to sell the property if a default occurs.

Why do I need a Complaint to Stop Foreclosure? Because California lenders pursue foreclosure without first commencing a court proceeding, you (the homeowner) must take the initiative to get the court involved. You do this by filing a complaint form with the court. The form is not particularly difficult. Our downloadable form (in MSWord format) involves just three quick steps: (1) download (2) fill in the blanks & sign; (3) take it to court. It really is that simple.

Will I actually stop the foreclosure process by downloading and filing the complaint? Because each situation and case is unique, nobody can guarantee that you will be successful in your case. However, California non-judicial foreclosure remedies have stringent notice requirements, and the loan documents must contain specific power of sale language. If you don't file a complaint to stop foreclosure, you will face the certainty of losing your home. Many homeowners have succeeded in stopping foreclosures because lenders and trustees were unable to locate original loan documents. This is a common occurrence because so many loans were assigned and transferred between different financial institutions and loan service companies during the past several years. You will not be able to protect your rights unless you file a form to stop foreclosure in court. In many instances, merely by filing the form, homeowners have been able to get the attention of lenders and begin serious negotiations for the first time. You will be able to meet the lenders' representative face-to-face, with the added leverage of the court's involvement.

Don't I need a Lawyer to do this? Most people who are facing foreclosure are unable to afford the huge legal fees that lawyers charge. Thus, although it would be ideal to have a private attorney, it is simply not a realistic option for many people facing foreclosure. Our forms kits are not a substitute for the services of an attorney, and we do not provide legal advice. Rather, we seek to provide a realistic alternative for homeowners who desperately need to take action to save their homes. Thousands of people throughout California (and the entire United States) have downloaded our stop foreclosure forms kits. By offering these materials at very modest prices, we are tring to provide hope and save families.

Under a deed of trust containing a power of sale, the borrower, or "trustor," conveys nominal title to property to an intermediary, the "trustee," who holds that title as security for repayment of the loan to the lender, or "beneficiary." The trustee's duties are twofold: (1) to "reconvey" the deed of trust to the trustor upon satisfaction of the debt owed to the beneficiary, resulting in a release of the lien created by the deed of trust, or (2) to initiate nonjudicial foreclosure on the property upon the trustor's default, resulting in a sale of the property. The beneficiary may make a substitution of trustee, to conduct the foreclosure and sale.

When the trustor (borrower/homeowner) defaults on the debt secured by the deed of trust, the beneficiary may declare a default and make a demand on the trustee to commence foreclosure. The California Civil Code contains a comprehensive statutory scheme regulating nonjudicial foreclosure. Generally speaking, the statutory, nonjudicial foreclosure procedure begins with the recording of a notice of default by the trustee. After the expiration of not less than three months, the trustee must publish, post, and mail a notice of sale at least 20 days before the sale, and must also record the notice of sale at least 14 days before the sale.