Hi Everyone: I have had to sit back and regroup a bit as I am overwhelmed how this mortgage banking and real estate fraud is playing out. This month's "Adding Insult to Injury" Award goes to Senator Ron Calderon. Along with the California Escrow Association, United Trustees Association, and Escrow Agents' Fidelity Corporation he authored Senate Bill 306 - the Omnibus Mortgage Legislation.
His web-site states, “My legislation is aimed at protecting struggling borrowers who desperately want to keep their homes, aiding consumers who wish to purchase homes, and jump-starting our housing recovery.”
The truth is that the legislation will do little if anything to help homeowners stay in their home. In fact, it resolves any ambiguities in last year's legislation in favor of the bank. What many attorneys don't understand or know is that Civil Code Section 2923.5, 2923.6 had become anchors in which we have had some success arguing in court meant that the legislature INTENDED banks to provide loan modifications when it makes sense. These code sections make reference to "net present value." What it means is that if your loan modification was going to offer a greater profit for the bank than if they foreclosed on the property and reinvested, then it was the duty of the loan servicer to offer a loan modification to you.
Senator Calderon's bill wipes out our legal argument that under Civil Code Section 2923.6, the duty owed by the loan servicers to maximize profits by using loan modifications extended to the borrower/homeowner. Instead it facilitates a short sale. I will talk about short-sales in my next blog entry. So let's add this all up. Now homeowners have less leverage to get a loan modification what will keep them in their home.
Adding insult to injury, the bill intends to facilitate a "short-sale" of your home. Makes sense that the Escrow industry wants more short-sales. BECAUSE IT GENERATES ESCROW FEES. THE BROKERS BACK IT BECAUSE IT GENERATES MORE FEES FOR REAL ESTATE BROKERS AND FOR MORTGAGE BROKERS. To make things worse. . typically the HOMEOWNERS GET NOTHING!!!!!!! It is absolutely infuriating to see our own politicians selling us out to the real estate industry by this sort of legislation!
Thank you Senator Calderon. Your Bill now kicks the legs out from under that argument to obtain loan modifications which would keep homeowners in their home. Now why would you go and do that? Did you get promises of future campaign contributions from the Escrow Industry. With term limits, are you negotiating with the banking and real estate industry early for your future employment by this bill that does very little if anything to help a homeowner stay in their home, but instead encourages homeowners to short sale their homes?
I'm so disgusted one more time. I hope people wake up soon and realize what you and the rest of the politicians out there appear to be doing.
Below is Senator Calderon's spin on things:
Senator Calderon's Omnibus Mortage Legislation
Thursday, August 06, 2009 at 5:15 PM
SACRAMENTO – The Governor today signed into law Senator Ron Calderon’s omnibus mortgage legislation, which makes changes to the escrow process that will make it easier to conduct short sales, and, in doing so, avoid foreclosures.
“California’s slumping economic climate and housing market have combined to create a fertile climate for the exploitation of consumers,” said Senator Calderon (D-Montebello), chairman of the Senate Banking, Finance and Insurance Committee. “My legislation is aimed at protecting struggling borrowers who desperately want to keep their homes, aiding consumers who wish to purchase homes, and jump-starting our housing recovery.”
A short sale is a sale in which a homeowner sells his or her house for less than what is owed on the mortgage, with the knowledge and approval of the lender. Short sales help homeowners avoid the financial and emotional toll of a foreclosure; help neighborhoods avoid the decay, vandalism, and negative pressure on property values that have come to characterize vacant, foreclosed property; and help lenders avoid the money-losing foreclosure process.
SB 306 facilitates short sales, by ensuring that escrow agents receive up-to-date, accurate information they need to cleanly transfer title to a property that is sold via a short sale. Prior to enactment of SB 306, escrow agents frequently lacked the information they needed to cleanly transfer title on short sale properties, which led to delays, and sometimes cancellations of these sales.
SB 306 also clarifies last year's SB 1137, a bill that required lenders to contact borrowers to discuss options for avoiding foreclosure; gave renters of homes that fall into foreclosure more rights; and gave local governments greater ability to crack down against foreclosure-induced blight. The clarifying changes in SB 306 will help borrowers and renters, by resolving unintended ambiguity in the prior legislation.
The bill was co-sponsored by the California Escrow Association, United Trustees Association, and Escrow Agents' Fidelity Corporation. It will become operative on January 1, 2010.
“Our housing market can be the engine that starts us on our return to economic prosperity,” said Senator Calderon.
Contact: Rocky Rushing
(916) 651-4030
