AVOID FORECLOSURE !

SB 1137 – Foreclosure Avoidance

New Foreclosure Law

On July 8, 2008 Governor Arnold Schwarzenegger signed a new law entitled SB 1137 – Foreclosure Avoidance. The intention behind the law was to give owners of residential property who might be in trouble on their real estate loans (on loans made between January 1, 2003 and December 31, 2007), options they may not have previously had, by requiring Lenders to work out a Foreclosure Avoidance plan.

Options for borrowers who are unable to afford their mortgage payments and who wish to avoid losing their property by Foreclosure may include the following:

•        If your loan has not matured, you may be able to bring your loan current if you are able to do so.

•        You may wish to contact the U.S. Department of Housing and Urban Development (HUD) who offers free or reasonably priced counseling regarding foreclosure. These counselors can help you get an understanding of the law and your options, help you get your finances in order, and possibly even represent you in negotiations with your lender or their loan servicing agent if you find you may require this help.
   

•        To find a HUD-Approved Housing Counselor call

               Toll Free 1-800-569-4287 or TTY 1-800-877-8339.

•        Using the website provided by HUD may offer other alternatives as well as valuable education including an article on “Tips to Avoid Foreclosure” at the following website address:

http://www.hud.gov/foreclosure/index.cfm

or contacting a “HUD Approved Housing Counselor” at the following website address:

 http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm

•       Refinancing your loan may be an option you wish to explore. You should contact the Lender who made you the loan, and/or the Broker who arranged your loan and see if this is a possibility they might consider. There is of course no guarantee that a refinance from your lender, broker or another lender is possible, but you should make the inquiry.
   

•   You may be able to sell your property before the foreclosure sale, and realize equity you may have build up. Time is very short once a default situation occurs, and you have to move quickly to get educated so you can make the tough decisions you may need to make and then act on them.

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COMMUNICATION

You should also communicate with your Lender or your Lender’s Loan Servicing Agent, (RLS) to inquire as to your particular Lender’s policies and views regarding your  particular situation.

Remember, your Lender may be having difficulties with other loans and be more sympathetic to your problems than you might otherwise think.

There are several options RLS may be able to discuss and possibly arrange with your Lender to avoid or delay the foreclosure proceedings.  

Open honest communication on all sides may sometimes relieve the painful situation with a solution you did not know was available.

These are some of the possible solutions to explore when in default:

•   Forbearance agreement or work out agreement:

The Borrower and Lender can sometimes come to agreement, which is always in writing, allowing the payments to be caught up over a period of time. You may be able to delay the foreclosure proceeding subject to certain requirements. Usually minimum requirements are to keep senior loans up to date and maintaining fire insurance in force. There are usually arrangements for post default payments as well. Each agreement would be different depending upon the facts of the situation and your Lender’s requirements.

•   Loan Modification:

A Loan Modification can take many forms and is subject again to the fact situation of each loan. There may be a chance to receive a reduction of interest rate on your loan temporarily, a deferral of interest due, a granting of a payment holiday if certain other requirements are met allowing you to catch up with the loan payments or sell your property.

•   Deed in Lieu of Foreclosure:

Sometimes it may be the best solution to grant the property to the Lender instead of going through foreclosure. If you are not able to sell the property, your Lender may accept the property in satisfaction of the loan.

•   Short Sale:

You may not be able to sell you property for the amount owed on it at this time, however you may be able to work out a discounted pay off of your loan, or other loans on your property. When a property is sold for less than the amount of the loans due on the property it is called a “short sale”. This might be something to arrange with your Lenders so that you can market your property for a price that it might sell.

•   Surrender of the Property:

Cooperation between the Borrower and Lenders is attained through honesty and communication. Remember, the Lender did not make the loan to buy your property, however, sometimes it is best to work out getting the property into the hands of the Lender in an agreement  which will leave all feeling better about the problem and often times mitigates the suffering in these difficult situations.

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BE PREPARED

In order to be prepared to fully discuss options available you should gather important information prior to calling us:

•    Copies of loan statements on the other loans on your property
   

•    Latest payment notifications and or letters from other lenders or loan
        servicers
   

•    Recent pay stubs from all qualified borrowers from the last two months
   

•    A written statement requesting a change to your loan terms
   

•    Bank Statements from all qualified borrowers for the past two months
   

•    Personal information list including names of qualified borrowers, property
  and residence addresses, social security numbers, contact phone numbers, employers with addresses and phone numbers, cell phone numbers, fax numbers and email addresses.
   

•   Download a Loan Application form which may help organize information CLICK HERE.

If the borrower is represented by an Agent or Representative you will need to complete the Agent authorization Form. A Form may be available from your Agent or Representative, or you may contact RLS to receive a form which may be filled out for this purpose. RLS will not speak to anyone about your loan without your written authorization.

The Toll Free number to contact

Reliable Loan Servicing is 1-(800)-508-4412.

Borrowers who may wish to discuss options to avoid foreclosure, or issues regarding a loan already in default or in foreclosure with RLS and/or their lender should call during regular business hours, Monday through Friday 9:00 AM to 5:00 PM Pacific Standard Time.

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Please be advised that Reliable Loan Servicing may be attempting to collect a debt and any information obtained will be used for that purpose.

The state Rosenthal Fair Debt Collection Practices Act and Federal Fair Debt Collection Practices Act require that, except under unusual circumstances, collectors may not contact you before 8 a.m. or after 9 p.m. They may not harass you by using threats of violence or arrest or by using obscene language. Collectors may not use false or misleading statements of call you at work if they know or have reason to know that you may not receive personal calls at work. For the most part, collectors may not tell another person, other than your attorney or spouse, about your debt. Collectors may contact another person to confirm your location or enforce a judgment. For more information about debt collections activities you may contact the Federal Trade Commission at toll free telephone number  1-877-FTC-HELP or go to the website for more information at http://www.ftc.gov.

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•  TO FIND A HUD APPROVED CERTIFIED HOUSING COUNSELING AGENCY CALL

          Toll Free 1-800-569-4287 or TTY/TDD 1-800-877-8339.

•        Using the website provided by HUD may offer other alternatives as well as valuable education including an article on “Tips to Avoid Foreclosure” at the following website address:

http://www.hud.gov/foreclosure/index.cfm

or contacting a “HUD Approved Housing Counselor” at the following website address:

 http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm

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