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Lawmakers Hear Testimony From Nevada Assembly Speaker About Foreclosure Mediation

November 19, 2009

As Fullerton loan modification attorneys, we are following with great interest a new bill intended to stem the tide of foreclosures. Assembly Bill 1588, the Monitored Mortgage Workout Program, would allow borrowers whose loans are in default to choose a monitored foreclosure mediation program in which a qualified monitor supervises the loan modification process. A press release published Nov. 12 by California Newswire reported that Nevada's Speaker of the Assembly, Barbara Buckley, traveled to Sacramento to testify about the success of her state's foreclosure mediation program. The Assembly Banking & Finance Committee also heard from housing experts, banks and consumer-oriented nonprofits about the effects of the proposed plan.

According to an earlier press release, AB 1588 was sponsored by Los Angeles Mayor Antonio Villaraigosa and introduced by Assembly Speaker Karen Bass, Assemblyman Ted Lieu of El Segundo and Assemblyman Pedro Nava of Santa Barbara, all Democrats. They hope to make loan modifications more accessible by having a mediator from the California Housing Finance Authority oversee them. Borrowers must elect to participate within 30 days of the notice of default, and lenders may not take further steps toward foreclosure until the process is completed. The state-appointed mediator helps both sides analyze the affordability of the modification for them, versus a foreclosure, and is authorized to propose alternatives if the parties cannot agree. If either side rejects the proposal or acts in bad faith, the bill allows the foreclosure to go through (in cases of homeowner bad faith) or allows homeowners to sue to enforce the alternative modification (in cases of lender bad faith).

As Redlands loan modification lawyers, we like what we know of this program. It has become clear through loan servicers' actions throughout 2009 that they do not want to make loan modifications. Nonetheless, they continue to offer them, and simply find reasons to delay or deny modifications, or offer sham workouts that don't improve the situation. Nevada's program, which uses similar rules, has already seen massive demand, with 80 to 100 borrowers a day requesting the program as of late September, according to Investors Business Daily. The same article said two of the first four cases ended in a viable loan modification and the third resulted in a deed in lieu of foreclosure. Nevada Supreme Court Chief Justice James Hardesty said he believed the program might incentivize lenders to take action before foreclosure -- an outcome we believe would be even better.

Howard Law LLP has practiced on the front lines of California loan modification law throughout the housing crisis. Our Moreno Valley loan modification attorneys have had good results negotiating with lenders to lower monthly payments by lowering interest rates, changing repayment periods or even changing the structures of some loans. We have been able to help many homeowners who had no luck dealing with loan servicers on their own, successes that we attribute to the fact that we are attorneys -- and when attorneys call, lenders finally understand that their borrowers mean business. In fact, we can and will file lawsuits if that's the best way to keep our clients out of foreclosure or void a loan created by predatory lending. We aim to leave every client with a monthly payment they can afford for the long term.

If you're struggling to get a fair deal from your loan servicer but you can't even get a human being on the phone, Howard Law can help. To learn more about your options at a free, confidential consultation, you can call us toll-free at 1-800-872-5925 or contact us through our Web site.