Foreclosure Defense Attorney in Sacramento, California
Options to Avoid Foreclosure
Alternatives are available to help you avoid a foreclosure. If you want to keep your home, you might qualify for a loan modification, forbearance, or repayment agreement. Or, if you’d like to exit the property without going through a foreclosure, you might be able to complete a short sale or deed in lieu of foreclosure. And if the government owns or backs your loan, you might qualify for a special workout option.
California’s Homeowner Bill of Rights
In July 2012, California Governor Jerry Brown signed the Homeowner Bill of Rights (HBOR). This landmark legislation was created to combat the foreclosure crisis and hold loan servicers accountable for exacerbating it. HBOR became effective on January 1, 2013. Certain HBOR provisions expired as of January 1, 2018; however, a bill to revive those provisions, was signed into law making HBOR permanent effective January 1, 2019.
Key provisions include:
Notification of foreclosure-prevention options: Your servicer must try to contact you at least 30 days before starting the foreclosure process to discuss your financial situation and explore your options to avoid foreclosure. Only then can your servicer can then start the foreclosure process by recording a notice of default in the county where your home is located.
Guaranteed single point of contact: If you ask for a loan modification or other foreclosure-prevention option, your servicer must assign you a specific person or team who can walk you through application requirements and deadlines.
Acknowledgment of application: If you apply for a loan modification, your servicer must notify you within five business days of any missing information, other errors, and deadlines for completing your application.
Restrictions on dual tracking: Your servicer must generally pause the foreclosure process while it is making a decision on your completed loan-modification application and until after it gives you time to appeal a denial.
Denial rights: If your servicer denies your loan-modification application, it must state its reasons and identify other possible foreclosure-prevention options in writing. It must also give you a chance to appeal the denial. You may submit a new loan-modification application if you have had a material change in your financial situation since the last application.
Transfer rights: If your servicer approves a loan modification or other foreclosure-prevention alternative and then sells or transfers your loan to another servicer, the new servicer must honor that foreclosure-prevention alternative.
The Homeowner Bill of Rights generally applies to first-lien mortgages on owner-occupied homes. If your servicer has violated the Homeowner Bill of Rights, please schedule a free case evaluation with our office.
Negligence in Foreclosure
In 2014, our office obtained an important victory for California homeowners. In the case of Alvarez v. BAC Home Loans Servicing, L.P. the Court held that a negligence cause of action can be sustained if a loan servicer mishandled an application for loan modification. See, Alvarez v. BAC Home Loans Servicing, L.P., 228 Cal.App.4th 941 (2014).
Alvarez is important for two reasons: First, it holds banks responsible for damages if they agree to review a loan modification application and still foreclose and second, it forces banks to properly review loan modifications using correct information. That means, if you are denied a loan modification and the bank used incorrect information, you may have claims for damages.
Recently, the California Supreme Court took up this issue and our office provided an amicus curie brief to help the Supreme Court decide this issue.
Our office has over a decade of experience litigation regarding wrongful foreclosure and other mortgage loan lender and servicer misconduct cases. If you want to understand whether you can stop a foreclosure sale, or understand your options to avoid foreclosure schedule a free case evaluation today.