How to avoid foreclosure in California is an ongoing process that begins with taking action immediately after a receiving a default or foreclosure notice.
It is even better if one seeks help earlier – when finances are fast getting tight and when missing the next monthly home loan payment is a real possibility.
Helping California homeowners avoid foreclosure has also been among the priorities of housing advocates and nonprofits in the state and among the issues addressed by legislators and officials in the state.
Last week, Governor Arnold Schwarzenegger signed into law a Senate bill which would make it illegal for any lawyer, broker, real estate agent, consultant or foreclosure prevention company to collect fees upfront from homeowners. The law requires any foreclosure prevention agent to collect fees only after the promised loan modification or foreclosure prevention service has been delivered.
State Attorney General Edmund Brown Jr. has also launched a consumer alert informing homeowners that it is now unlawful for foreclosure prevention services to charge fees upfront and to collect fees for services that have not been provided or completed.
Brown explained that a lot of distressed homeowners have been victimized by unprincipled lawyers and brokers in the past because there was no law preventing them from charging fees and collecting fees at the initial meeting. Essentially, the homeowners paid for smooth talks on how to avoid foreclosure and for promises that were not delivered.
Last August, Brown required 386 foreclosure prevention consultants and mortgage assistance firms to register and make a $100,000 bond with his office. He also ordered over 24 foreclosure prevention firms to prove the truthfulness of claims they were making in their Internet and direct mail advertising.
Since July, the state attorney’s office has sued 14 firms and 21 individuals who have victimized homeowners, has obtained court orders to close over 30 firms and has helped the courts impose prison sentences on deceptive mortgage consultants.
This year, over 2,500 homeowners have filed complaints against foreclosure prevention providers with his office, a staggering increase from only 200 complaints filed in 2008.
The state attorney also reiterated his advice to troubled homeowners not to pay fees upfront, not to ignore letters from their lenders and servicers, not to transfer their titles to anyone, not to make loan payments to foreclosure services and not to sign documents without first reading them thoroughly.
All in all, how to avoid foreclosure is not an easy process, but homeowners in California can carry them out with help from their state officials and nonprofit counselors.