Homeowners in the state of California are struggling as a July statistics showed the state has the highest foreclosure rate in the nation.
The recent report from RealtyTrac showed that even though foreclosures were down over the same period last year California homeowners are facing disproportionately high numbers of home seizures. One in every 325 California homeowners received default notices, which is twice the national average.
Riverside, California is ranked number two in the country for foreclosures. Ranking number one is Stockton which recently filed for bankruptcy citing declining tax revenues as one of the reasons it became financially insolvent.
In the midst of this crisis lawmakers in California have passed new laws which are meant to protect homeowners from unsavory bank practices. The Homeowners Bill of Rights give added protections to troubled homeowners by stopping “dual-tracking;” a common practice where a bank puts a home into foreclosure, while the homeowner attempts to obtain a loan modification.
Mortgage modifications are one of the ways to stem the tide of foreclosures, but major mortgage lenders have been reluctant to grant modifications in favor of short sales. Having a foreclosure attorney can boost a qualified homeowner’s chances of getting a loan modification.
Another measure to stave of foreclosures being considered by lawmakers in some California states is imminent domain, where the city would seize a property, and with funds from an investment group the homeowner would be offered a lower more affordable mortgage. This is however is a controversial move, and cities are reluctant to utilize this power, but that may change of the crisis continues to get worse.
Although, added legal protections can stop some foreclosures, the real driver of the problem is unemployment which has been slow to improve in California and the country as a whole.
