Banks increased foreclosure activity in August, contributing to an increasing number of foreclosures in the third quarter of 2011. This brings to a close a nearly year-long let-up in foreclosure activity across the state.
According to DataQuick, the number of notices of default filed increased by close to 26% over the second quarter. During the second quarter, the number of notices of default filed had dropped to a three-year low. During the quarter that ended September 30, an estimated 71,275 notices of default were filed against California homes. For any homeowner or California foreclosure alternative lawyer, filing of a notice of default denotes the first step in the foreclosure process.
Most of the homes that are now going into foreclosure were purchased with loans that were made between 2005 and 2007, the peak of the housing bubble. During that time, many loans were made to people who did not have the means to repay them, resulting in numerous foreclosures.
Investigations found that banks had used faulty documentation and shoddy practices in order to speed up loan approvals. Additionally, there were numerous investigations into foreclosure and mortgage practices that led to a backlog of distressed properties. Now, banks have accelerated foreclosure activity again.
The increase in foreclosures also comes as talks between California and federal officials over a broad foreclosure settlement have stalled. The talks involve the five largest national mortgage service providers, and state attorney generals. California recently decided to drop out of the talks, and resolve the foreclosure crisis in the state on its own. California Atty. Gen, Kamala Harris has been unhappy with the negotiations with mortgage service providers because she believes that the banks are being offered broad relief from legal liability in these foreclosures.
Monday, October 24, 2011
Wednesday, October 19, 2011
California Democrats Call on Federal Administration to Take Action on Foreclosures
Frustration over the state’s continually high number of foreclosures is causing concern among California foreclosure lawyers and lawmakers too. California House Democrats last week criticized the Obama administration for not doing enough to resolve the foreclosure crisis.
The Democratic delegation has sent a letter to the president, asking him to take measures that housing groups have been pushing for ever since the financial crisis began. These measures include refinancing all mortgages owned or guaranteed by Fannie Mae and Freddie Mac, and allowing principal write-downs of certain mortgages through bankruptcy protection in order to avoid foreclosures. The measures also include establishing a Homeowners’ Bill of Rights that would require the review of documents in a timely manner and include other changes that benefit homeowners.
Much of this criticism of the administration’s handling of the foreclosure crisis has to do with the fact that next year is an election year, and many of California's lawmakers are bound to face disgruntled voters. Some lawmakers, like those in the Central Valley district, may find this to be an especially difficult election, because these areas have been hit especially hard by foreclosures.
While the Obama administration has called on regulators who are currently overseeing Fannie Mae and Freddie Mac to allow more refinancing, it has rejected mandatory refinancing of all mortgages. Measures like this would add to the federal administration's already huge bailout bill.
The federal administration has responded to California lawmakers’ concerns by assuring them that the president is already taking measures to help struggling homeowners, especially those in states like California with a massive foreclosure crisis. The Hardest Hit Fund will be diverging funds to states that have the most foreclosures, including $2 billion to California.
The Democratic delegation has sent a letter to the president, asking him to take measures that housing groups have been pushing for ever since the financial crisis began. These measures include refinancing all mortgages owned or guaranteed by Fannie Mae and Freddie Mac, and allowing principal write-downs of certain mortgages through bankruptcy protection in order to avoid foreclosures. The measures also include establishing a Homeowners’ Bill of Rights that would require the review of documents in a timely manner and include other changes that benefit homeowners.
Much of this criticism of the administration’s handling of the foreclosure crisis has to do with the fact that next year is an election year, and many of California's lawmakers are bound to face disgruntled voters. Some lawmakers, like those in the Central Valley district, may find this to be an especially difficult election, because these areas have been hit especially hard by foreclosures.
While the Obama administration has called on regulators who are currently overseeing Fannie Mae and Freddie Mac to allow more refinancing, it has rejected mandatory refinancing of all mortgages. Measures like this would add to the federal administration's already huge bailout bill.
The federal administration has responded to California lawmakers’ concerns by assuring them that the president is already taking measures to help struggling homeowners, especially those in states like California with a massive foreclosure crisis. The Hardest Hit Fund will be diverging funds to states that have the most foreclosures, including $2 billion to California.
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