I’ve been getting a lot of calls recently from people who are facing foreclosure, saying that they were trying to negotiate a loan modification with their lender through their mortgage servicer and the process somehow failed or stalled, wondering what to do next, and asking questions about foreclosure avoidance.
I figured I would post some links for homeowners facing foreclosure for the post-pandemic era. These are links straight through to the California Department of Justice, Office of the Attorney General, so they are as real as it gets, with an important caveat at the bottom.
START HERE: THE CALIFORNIA HOMEOWNER BILL OF RIGHTS.
This is a short read that outlines the steps a loan servicer has to take before and during the foreclosure process for owner-occupied homes with no more than four units, with links to help you find attorneys and a complaint form. Only you know if the servicer followed the required steps. Speak up if they didn’t, and make them do their job right.
STEP 2: KNOW YOUR FORECLOSURE PREVENTION OPTIONS.
This is a little longer read, but it describes the different kinds of “home retention” options that may be available to you and plainly defines the terms you’re going to need to know when you talk to your loan servicer, lender or attorney. Then it goes on to describe the various SCAMS that may target you and how to avoid them!
BEFORE YOU PAY A LAWYER FOR HELP, YOU CAN GET ADVICE FOR FREE FROM THE STATE!
Copied from: https://oag.ca.gov/consumers/homeowner-issues:
Resources and Assistance to Avoid Foreclosure
Seek out help to think through foreclosure alternatives, such as by contacting a HUD-approved housing counseling agency. A housing counselor can assess your situation and help you prepare for discussions with your mortgage servicer. To find a HUD-approved housing counseling agency near you, access HUD’s database for Foreclosure Avoidance Counseling or call 888-995-HOPETM (4673).
The California Housing Finance Agency (CalHFA) sponsors special programs for homeowners facing foreclosure that may help you retain your home or provide funds to relocate to new housing. Visit CalHFA’s Hardship Assistance Page to view options available to you.
Homeowners who have fallen behind on mortgage payments due to COVID-19-related financial hardship may be eligible for relief through CalHFA’s California Mortgage Relief Program. This program will pay a total of $1 billion to cover missed mortgage payments during the COVID-19 pandemic. This is a one-time grant that eligible homeowners will not have to repay. To find out if you are eligible and to apply, visit the California Mortgage Relief Program web page.
For more information about mortgage relief and foreclosure alternatives, go to the Housing Is Key web page.
The actual, written law will always beat a government website/flier/pamphlet etc. in a legal dispute. If you take any irrevocable actions based on the guidelines set forth on a government website (or based on a phone call with a government employee), and it turns out the agency provided you with the wrong guidance, then you are still responsible for getting it right. Whether its zoning, taxes, permits, etc. – you have to follow what the law says, not what the agency’s summary of the law says. In most cases you will be totally fine, but just be aware that “I did it how they told me to do it, so it’s their fault not mine” is not actually a defense if it turns out you were given incorrect guidance. So you might end up needing a lawyer anyway to review the actual, written law for you. All I’ve provided above is the government’s guidance.
Hope that helps!