The California Legislature Moves to Slow Foreclosure Process Again

There are a number of housing bills moving through the California State legislature. Their effect if passed will be to further delay the foreclosure process.

Irvine Home Address … 20 ROSE TRELLIS Irvine, CA 92603

Resale Home Price …… $1,250,000


Burn burn, house on fire

I'm so sick and tired

I can still remember your sound

And it's cut cut cutting me down

I'm locked and loaded

You're so milk and roses

And i am just a letdown of your hound

And It's cut cut cutting me down

Like slow poison

Cut down like slow poison

The Bravery — Slow Poison

The housing bust has been a slow trickling of mortgage poison. Too large a dose and prices crash, and too little… well, that means the banks allow a lot of squatting, a poison bound to find its way to the US taxpayer.

California Senate Passes Foreclosure Legislation

by JON PRIOR — June 4, 2010

The California State Senate passed legislation this week in an effort to prevent avoidable foreclosures.

Senate Bill (SB) 1275 requires mortgage servicers to notify borrowers of a right to seek options that would avoid foreclosure and attach an application for a loan modification or other alternatives before issuing a notice of default (NOD). Also before filing an NOD, servicers must evaluate a borrower who submits a written request for a loan modification. For those denied one, a separate letter must be mailed to the borrower informing them of the denial and reasons why.

This is some added paperwork for lenders, but it isn't onerous. Lenders already have a lengthy checklist of items for their loan files. Adding a couple of lines to the list and a few sheets of paper won't be too painful.

The bill was authored by Sen. Mark Leno (D-San Francisco) and Senate President Pro Tem Darrell Steinberg (D-Sacramento). The bill will now move to the California State Assembly for consideration by the Assembly Banking Committee.

Eligible mortgages must have been originated before Jan. 1, 2009 and must be a single-family, owner-occupied residential property.

Interesting that this bill doesn't apply to new mortgages. I guess if you bought last year, they can still kick you to the curb under the old rules.

Under the bill, servicers must file a new declaration of compliance before recording the NOD. It is a checklist of all of the requirements completed before the NOD is filed. If this new document is not filed, damages could be awarded to the borrower, and the foreclosure could be voided.

If they slipped in borrower damages, this will become an attorney graft measure.

Also, if the home is sold at auction out of servicer error, recourse is provided in the form of a private right of action. It allows eligible homeowners to seek limited damages and could even reverse the foreclosure sale. Before the bill passed, there was no recourse for erroneous foreclosure sales.

What exactly is an erroneous foreclosure? Aren't these people delinquent on their loans? Don't the banks have foreclosure rights at their discretion?

According to the Center for Responsible Lending, servicers are initiating the foreclosure process while handling borrower’s requests for resolutions.

“Simple fairness dictates that no one should lose their home while they are in the middle of trying to save it,” said Paul Leonard, director of the California office of the Center for Responsible Lending.

I might agree with the above statement if the borrower is genuinely trying to save their home. If they are just gaming the system, I don't like the idea of giving them tools to game it longer.

California Set to Vote on Foreclosure Mediation Bill

by JON PRIOR — June 2, 2010

A bill that establishes a foreclosure mediation program in California passed committee and will reach the California State Assembly floor this week.

Assembly Bill 1639 was introduced by a trio of Democratic members of the assembly — Pedro Nava (Santa Barbra), Ted Lieu (Torrance) and speaker emeritus Karen Bass (Los Angeles). If passed, the bill would establish the Facilitated Mortgage Workout (FMW) program. Through it, lenders are required to meet with borrowers to develop a modification plan before foreclosure.

Required to meet? What happens when borrowers refuse? Or when they agree and cancel to drag out the process? A requirement to meet is almost guaranteed to be a way to delay the process.

The loan must have originated before Jan. 1, 2009, and the home must be occupied by the borrower as a principal residence. The principal balance on the mortgage cannot exceed $729,750.

The jumbo loan market is so screwed.

The bill passed the Assembly Appropriations Committee last week.

“This legislation sends a strong message to the banking and mortgage industry — that business as usual is not working. We will force the industry to do more to help struggling California families facing foreclosure,” Nava said. “This legislation will require face to face meetings between homeowners and their lenders—so that a mutually acceptable plan can be implemented that keeps families in their home.”

What if the plan is not mutually acceptable? What bargaining power does the borrower really have? If borrowers don't like the deal they are presented, can they say no? What happens then?

The bill also requires lenders to include information regarding the program with the notice of default. The borrower must return a form to the administrator of the program requesting a mediation within 30 calendar days of receiving the notice of default and must send other information within 15 days of the request. Borrowers must deposit with the administrator of the program 50% of the current mortgage payment each month while he or she participates in the FMW program.

The assembly just guaranteed no borrowers will sign up for the program. The allure of strategic default and negotiated short sale is that the borrowers get to squat. If they actually have to make a partial payment, participation will drop off dramatically.

Lenders must meet with the borrower within 14 days of contact with the borrower. The program expires Jan. 1, 2014. According to RealtyTrac, an online foreclosure marketplace, one in 192 homes received a foreclosure filing in April 2010. It’s the fourth highest foreclosure rate in the country.

“This crisis has devastated thousands of California families and communities. We have to take a new approach to help families remain in their homes,” Nava said.

This Nava is posturing bureaucrat. His quotes are rather silly, but they appeal to a desperate constituency.

In better news, this headline excited me:

California Eyes Statewide Mortgage Reform

Tuesday, June 2nd, 2009, 10:15 am

Wracked by distressed home sales in the wake of massive foreclosure volumes across the state, California may become the first state to implement a state-wide piece of mortgage reform legislation

The California State Assembly passed AB 260, a bill reforming mortgage lending and specifically banning predatory lending practices, according to a report filed at the California Chronicle today.

"We must enact landmark reforms to address the systemic failures in California's subprime mortgage industry," said California Assembly member Ted Lieu, according to the Chronicle. "These failures have not only devastated California's economy, they have contributed to a national and international financial meltdown."

So far, I appreciate the sentiment. We really do need to do something to prevent the house price casino from taking over. With unrestricted HELOC withdrawal at 100% value still a legal possibility (unlike Texas), then we will again inflate a housing bubble. Unfortunately, although the lead-in was promising, the proposals were not.

The legislation, if enacted, will create a fiduciary duty standard for mortgage brokers, eliminate compensation incentives that encourage the steering of borrower into risky loans, and establish regulations on prepayment penalties. The overall goal is to eliminate subprime lending, a leading cause of the state's foreclosure woes.

Are they really going after subprime lending? I don't think so. Can you imagine the uproar from advocates of low-income housing?

Putting a minimum standard of performance on mortgage brokers is a good thing, but that will do nothing to prevent the next housing bubble. As rhetoric to help pass legislation, it is probably effective, but it is not a protection against market bubbles they are selling it as.

California saw one in 138 housing units receive a new foreclosure filing in April, the third-highest state ranking, according to RealtyTrac.

The state experienced its 10th consecutive month of pick up in home sales during April, with foreclosures accounting for 53.6% of all southern California's resales in the month. California's foreclosure notices–the first step in the foreclosure process–dropped 18% in the month, indicating foreclosure sales may be on their way to slowing, despite the continued high volume of foreclosures in the state.

Write to Diana Golobay.

The shift away from foreclosure notices will not be permanent. Banking industry people I have spoken with have told me there will be a shift toward more short sales in 2010 since the foreclosure pipeline is already full past capacity. Lenders are struggling to find the level of market absorption that does not lower prices. The increasing inventory will continue to increase until lenders see prices weaken, then they will pull back. As the inventory increases, we will see if the banking cartel can hold it to a manageable level.

Another Ponzi that spent the house and squatted for a long, long time

I have a sneaking admiration for the guys who skillfully manipulated the system to extract the largest possible amount of cash and then squat for as long as possible. Although I find the behavior atrocious, I am impressed that they figured it out.

  • Todays featured Ponzi bought this property on 12/9/2004 for $1,381,000. He used a $1,000,000 first mortgage a $242,600 second mortgage, and a $138,400 down payment.
  • On 12/7/2005 he refinanced with a $1,267,500 Option ARM with a 1.25% teaser rate.
  • On 12/7/2005 he also obtained a $97,500 HELOC.
  • On 6/1/2006 he opened a $518,023 HELOC.
  • On 6/13/2006 he got a $97,500 HELOC. It looks as if he applied and obtained HELOCs from two different banks at the same time.
  • Total property debt is $1,880,033.
  • Total mortgage equity withdrawal is $640,433.
  • Total squatting is at least 24 months.

Foreclosure Record

Recording Date: 05/19/2010

Document Type: Notice of Sale

Foreclosure Record

Recording Date: 02/16/2010

Document Type: Notice of Default

Foreclosure Record

Recording Date: 11/06/2009

Document Type: Notice of Rescission

Foreclosure Record

Recording Date: 12/08/2008

Document Type: Notice of Sale

Foreclosure Record

Recording Date: 09/02/2008

Document Type: Notice of Default

In his first two and a half years of living in this house, it provided him with a $250,000 per year spending stipend. Once the money ran out, he was able to stay there another two years — free.

I wonder how he feels about that?

Irvine Home Address … 20 ROSE TRELLIS Irvine, CA 92603

Resale Home Price … $1,250,000

Home Purchase Price … $1,381,000

Home Purchase Date …. 12/9/2004

Net Gain (Loss) ………. $(206,000)

Percent Change ………. -9.5%

Annual Appreciation … -1.8%

Cost of Ownership


$1,250,000 ………. Asking Price

$250,000 ………. 20% Down Conventional

4.91% …………… Mortgage Interest Rate

$1,000,000 ………. 30-Year Mortgage

$256,179 ………. Income Requirement

$5,313 ………. Monthly Mortgage Payment

$1083 ………. Property Tax

$375 ………. Special Taxes and Levies (Mello Roos)

$104 ………. Homeowners Insurance

$410 ………. Homeowners Association Fees


$7,286 ………. Monthly Cash Outlays

-$1449 ………. Tax Savings (% of Interest and Property Tax)

-$1222 ………. Equity Hidden in Payment

$474 ………. Lost Income to Down Payment (net of taxes)

$156 ………. Maintenance and Replacement Reserves


$5,245 ………. Monthly Cost of Ownership

Cash Acquisition Demands


$12,500 ………. Furnishing and Move In @1%

$12,500 ………. Closing Costs @1%

$10,000 ………… Interest Points @1% of Loan

$250,000 ………. Down Payment


$285,000 ………. Total Cash Costs

$80,400 ………… Emergency Cash Reserves


$365,400 ………. Total Savings Needed

Property Details for 20 ROSE TRELLIS Irvine, CA 92603


Beds: 4

Baths: 3 full 1 part baths

Home size: 3,400 sq ft

($368 / sq ft)

Lot Size: 6,252 sq ft

Year Built: 2004

Days on Market: 88

Listing Updated: 40254

MLS Number: S609494

Property Type: Single Family, Residential

Community: Turtle Ridge

Tract: Ledg


Affordable 4 bedroom 3.5 bath Ledges home with approximately 3400 sqfeet of elegance behind the guarded gates of the prestegious Summit At Turtle Ridge. Huge master suite upstairs. Extra large gourmet kitchen with a sunny breakfast room. State of the art stainless steel appliances. Oversized family room with fire place. Large formal dining room and Living room. 2 Bedrooms and 1.5 Bath down and 2 Bedroom Suites upstairs. No Casitas. Beautiful courtyard. Fabulous resort like association facilities with club house,Gym, pool and spa. Peaceful walking trails throughout the neighborhood.


51 thoughts on “The California Legislature Moves to Slow Foreclosure Process Again

  1. wheresthebeef

    I wonder if any of these profiled HELOC abusing squatters are made aware of their 15 minutes of fame on the IHB. Maybe their kids are shamed at school for having deadbeat parents. Who knows, they are probably proud of their accomplishment, they obviously won this little chess match for now.

    At least this person has the dignity to maintain the landscaping, unlike that other TRidge douche profiled earlier this week.

    1. Geotpf

      At least this one has landscaping. The other home “owner” did not not maintain it; they simply never put any in.

    2. CA

      Doubt their kids are shamed at school…I don’t think kids understand the concepts of NOD’s and MEW. All they know is “johnny’s parents have a big house.”

      oh and i’m sure there are other parents that are strategically defaulting as well.

      shame? hah, that went out the window a long time ago. this is a great business decision.

      1. Misstrial

        Sorry but you are wrong.

        My kids attended schools in TR and whether adults like it or not, kids keep track of financials.

        There is no question in my mind that any kids involved are going to be outed. In some circles they will be honored in others they will no longer be considered with the same consideration as before.

        Kids will actually let it be known how much they have in their trust fund in order to compare and exhibit their worthiness to be in TR.


        1. tonye

          Yep… Suddenly all of those seniors at Uni no longer have their new Bimmers and Lexus and are going to public universities. While the kids from TR are all going to private colleges.

          Or those kids from the private HS up the Hill suddenly are commuting to Uni…

          OTOH, so long as the parents are squatting at TRidge, they have more money than the parents at TR and most of NB.

          Life sucks.

          1. Misstrial

            I take it from your response, you are a squatter.

            Nonetheless, “No”, squatters will not “have more money than the parents at TR and most of NB.”

            To make such a statement, well, very uninformed, imo.

            Average salary of NB per the IRS is about $325k/yr depending on the zip.

            TR is lower, in the $145+ range.

            If squatters were rich, then they would be able to afford to take a loss via short sale or just sell low.

            Kids at UNI (spelled all caps) that have trust funds generally tend to be in the range of $50k+. These are kids under the age of 18 with financial assets…and with no foreclosure/late payments/debt to deal with (unlike squatters).


          2. Planet Reality

            Misstrial, your data is right on.

            About a third of kids under 18 years of age at UNI have enough cash for a down payment on an Irvine home. People need to start accepting reality. There is real money in Irvine, the posers are slowly being kicked to the curb and cash is finding a home in Irvine.

          3. tonye

            ROTFLOL…. Why would you think I’m a squatter?

            I’ve lived in TR for more than 20 years.

            My mortgage is current (did do a refi when we did a rebuild so our RE tax is 3700 a year…).

            My kids have trust funds.

            My older kid at Uni is going to private a private university next year (my alma matter).

            My two kids have been going to Uni for a while… obviously.. and they have lived in TR all their lives. They know several of their friends who moved to TRidge and suddenly they were rich.

            Now, income and paycheck is pretty much irrelevant. Many folks living in TR have paid off their mortgages or owe very little. Hence, making 200K a year ( ignore the condos ) when you have no mortgage and the kids are done with college is more than living with a mortgage in Corona del Mar or Cameo Shores and sending your kids to college ( those are my favorite NB places).

            OTOH, if you’re squatting in TRidge and making 200K a year you’re pretty well off too.

            And I call it “Uni”…. my kid’s T-Shirt uses that spelling. So there.

          4. Irvine middle class

            Who wants to live in Irvine if you have a significant amount of cash? All these old, ugly small buildings with too many neighbors, no garden, and too close to the 15 different highways that all seem to intersect somewhere in Irvine. Too far to the beach and with all these middle class people? Maybe NPB or Newport Coast, maybe Laguna Beach, but Irvine? Not gonna happen. All you find in Irvine is overstretched middle class praying that they don’t loose their jobs since otherwise they won’t be able to make the payments for the ARM that is about to reset…Everything else is wishful thinking by a realtor.

          5. tonye

            Ay! TR ain’t Woodbridge you know….

            Besides, when I retire, I want to build La Nueva Ponderosa in Virginia City.

            Shootin’ from my back porch for kicks.

            A brand new truck out front.

          6. Tyler D.

            Not true. That’s not how Asians work. Maybe you should ask an Asian or at least say hello to one…when the economy blows, it eventually affects everyone. Not sure where Planet Reality is…but it must be quite a ways from Earth.

          7. Tyler D.

            …and kids don’t pay attention to finances like that…maybe if they have a parent obsessed w/ discussing it (uhhhm), then yeah…but get real. Teenagers see a big house, Mercedes and that’s all they need to know…like the care how it all got there…

          8. Misstrial

            Sorry, but UNI is spelled all caps and so do the tee shirts for the pep squad.

            btw, try not to have a written tone of a deranged person – its annoying.

            Lastly, attempt to make yourself clear the first time, that way, you do not have to rely on low-budget acronyms to get your point across.



          9. Misstrial

            Planet Reality – thank you for your post, which is, in fact true.

            Anecdotally my kids’ experiences at UNI were that the children of physicians, dentists, and those in financial industries tended to own large trust funds/UTMAs.

            My kids were accepted by a certain group since their trust funds are quite large. The kids at UNI tended to be sophisticated financially, more so than most would suspect.


          10. JK

            …”My kids were accepted by a certain group since their trust funds are quite large.”

            Those that feel the need to brag about money are usually insecure in many ways from my observations.

            UNI- University of Northern Iowa

          11. ddigler

            I’m an old alumnus who went to Uni and CIF. Uni was always capital case and CIF is all caps. Perhaps you’re confusing the two because nobody puts much emphasis on sports at Uni any longer.

            The pompous arses back then lived in NB and we were pretty much the folk who lived in the Irvine Valley… hence IVC. Can’t figure out when living in Irvine became a source of status.

          12. Irvine Trust Funds

            Chris, don’t be mad just because my 12 year old has more cash for a down payment than you do. Be made because he already scores higher on the SAT than you.

          13. Chris

            Yeah my SAT score ain’t that great…..sigh…..only good enough for UCLA.

            It’s great that your kids’ SAT scores are good enough for University of Second Choice (USC).

            Good luck.

          14. Freetrader

            That is just sad. Obviously your kid didn’t inherit his alleged academic ability from you.

          15. Flyovercountry

            Troll or genuine Irvine d-bag… Hard to tell.

            I think the Planet Realty is right, the bubble is back, the pretentious OC types are back in force.

          16. tonye

            Sorry to burst your bubble. The only was a kid for Uni is going to UCLA this last year was to be on the top 3% of the class.

            Now then, I went to the Senior Awards ceremony since my son and his buddies all got awards.

            To be on the top 3% and get automatic acceptance to the UC of your choice, you pretty much have be Magna Cum Lauda, with about 8 SAT tests under your belt and a GPA over 4.5. And a National Merit Finalist (PSAT) with a scholarship to boot.

            So here’s the catch 22. If you got those grades you likely have a full boat ride at some real, REAL good school.

            But if you don’t, if you’re only in the top 25% of the senior class, you still got accepted to USC and a bunch of damn good private universities. Perhaps not a full ride, but with significant money on the table. After all, the top 20% at Uni is at the top 98% in the nation.

            But, of course, UCLA didn’t take you. Because, they cut down on in state students and increased their out of state (this came from UCI faculty) take. They didn’t cut their politically correct local 3% take.

            So if you are at Uni, you don’t go to UCLA regardless. The top 3% are gone private, the other 50% are gone… private as well.

            BTW, my son was put in the waiting list at UCSB. UCR and UC Merced accepted him out of the blue (he rejected that unwanted consolation price). USC, ASU and two other private universities accepted him, with up to 10K a year cash.

            By the time UCSB decided to accept him, he turned them down. He’s going to a private university.

            So are all of his buddies.

          17. Boston2theBay

            Same thing up here with Cal – they went heavy on out of state acceptances to shore up the budget. UC is fast becoming a shadow of itself, and the secondary campuses are being relegated to 2nd tier status.

          18. Swiller

            The funniest ass sh1t ever though…is the very real fact you couldn’t even AFFORD to buy and own in TR now. You are part of the “beggar class” that will be wiped out when you finally sell….unless you plant to hand the house over to your kids.

            $3700 a year. It’s an insult. There are people on condo’s paying more in taxes than your killer TR home. Go Prop 13!!! Welfare for those already rich!!! Holy permanent press Batman! Those people couldn’t afford the payments on the 2010 BMW for their UNI high CHILD if they had to pay their FAIR SHARE in taxes.

            I’m glad at one time, regular working class people could afford to buy in Irvine, but it’s a mite bit frustrating when those same people spout as though they are special simply for making a LUCKY decision and having the good blessing to keep breathing and working and making a supremely small payment for a nice home for “over 20 years”.

            The rest of us….we got F#$ked.

    3. Chris

      “I wonder if any of these profiled HELOC abusing squatters are made aware of their 15 minutes of fame on the IHB. Maybe their kids are shamed at school for having deadbeat parents.”

      Kids nowadays don’t do blogs (think Facebook and Twitter). Blogs are for old people (such as myself).

    4. Ochomehunter

      I am no republican but I request all folks to boot out all semators out of office come November. Democrats in specific are pricks. These a-holes dont have a clue of what they are doing to the market by delaying the inevitable.

  2. winstongator

    What is the payment difference for a “$1,267,500 Option ARM with a 1.25% teaser rate.” relative to say a 6% FRM? You could count that difference as ‘income’ too.

  3. awgee

    My immediate thought is that this makes buying at trustee sale much less attractive. How will a potential bidder know if the owner has received the requisite notifications and offers of loan modification? It occurs to me that this legislation may have the opposite effect of it’s intention.

    1. chipotle

      That is a very astute observation. Legislators are great at not anticipating the consequences of their actions.

  4. theyenguy

    FYI … HousingWire reports CoreLogic Adds Foreclosure Data to Distressed Property-Listing Web Site one can use the link for a detailed report

  5. IrvineRenter

    Bank of America Puts Short Sales Ahead of REO

    Tuesday, June 8th, 2010, 5:04 pm

    Bank of America, one of the largest lenders in the U.S., has instituted a policy of liquidating as many assets saddled with defaulted loans as possible before repossession, said Matt Vernon, the short sale and REO executive at BofA.

    Vernon took the position at BofA in February. He has since announced plans to add 1,000 employees to the short sale staff. BofA currently holds more than 477,000 loans eligible for the Home Affordable Modification Program (HAMP), and has provided more than 600,000 modifications through HAMP and its own programs.

    But Vernon said BofA will continue to make the short sale push when he spoke on a panel at REO Expo, being held this week in Dallas.

    “We’re going to do everything possible to liquidate property prior to foreclosure,” Vernon said. “REO will still be available, but we will do everything we can to do short sales.” Vernon said the goal is to get as close to market value as possible, or even over market value. “Short sales is not an investment strategy to get homes on the cheap,” he said.

    He added that agents who want a part of that market need to make short sales a major part of their business strategy through 2010 and into 2011.

    Not just agents, but other companies in the default space were listening as well. Danielle Washburn, assistant vice president at Lender Processing Services Asset Management Solutions said lenders are beginning to put more emphasis on short sales because of recent efforts from the current Administration.

    The Treasury Department launched the Home Affordable Foreclosure Alternatives (HAFA) program in April to provide incentives to servicers to provide short sales and deeds-in-lieu of foreclosure.

    “Because of programs like HAFA, the process is getting easier,” Washburn said. “But they remain very complex. There are sometimes 10 decision makers with just one transaction, the lender, the buyer, the seller, mortgage insurer, investors and more. Just one of them can stop the whole deal.”

    Milton Shaw, senior vice president of LPS Asset Management Solutions, said modifications and short sales through HAMP or HAFA could just be delaying the inevitable foreclosure and REO process, and the real estate business is growing frustrated with the delays.

    “There’s just been an incredible amount of frustration,” Shaw said.

    Both Washburn and Shaw agreed that more short sales will be on the way as HAMP continues to underwhelm both the industry and the public. In implementing the push for short sales, Vernon said a lot has been learned from HAMP.

    “We are learning from the past where we struggled mightily,” Vernon said, “and from now as we still struggle. We need the best to execute these transactions.”

    Write to Jon Prior.

    1. mike23w

      * “we will do everything we can to do short sales.”
      * goal is to get as close to market value as possible, or even over market value.
      * “Short sales is not an investment strategy to get homes on the cheap,”

      they want us to buy their crappy short sale, difficult to buy, distressed property over market value.

      who the f*ck is going to go through the hassle of paying more than market for a potentially lower quality (damaged by squatters), more difficult short sale? the vast majority of them don’t even close and the ones that do take months to close.

      but that idiot Vernon is sure to tell buyers it’s not an investment strategy to get homes cheap.

      BofA can go f*ck themselves.

  6. IrvineRenter

    This is good news?

    Good News on Mortgage Delinquencies: Fitch

    Some good news from Fitch this morning on mortgage delinquencies: May Residential Mortgage Backed Securities (RMBS) delinquencies declined for the second straight month, following a steady four year increase.

    (RMBS are bonds backed by residential mortgages.)

    Still, it is pretty staggering to look at the size of the delinquencies, which are defined as 30 days or more past due.

    For subprime: 44.8 percent, down from 45.2 percent in April. But think about it: roughly 44.8 percent of subprime loans are in delinquency.

    For Alt-A — borrowers with less than full documentation and lower credit scores (so called “Liar Loans”) — the numbers were almost as high: 33.9 percent, from 34.1 percent in April.

    Still, at least it’s improving.

    Here’s the bad news: Fitch cautions that “approximately 9 percent of performing Alt-A loans and 37 percent of performing subprime loans are modified and have a substantial risk of re-default.”

  7. Soylent Green Is People

    Ok, so if I’m clear on this….450 days from 1st payment default to the final day when the cops are there tossing you out is “lightning quick” and they want to slow down this process?!?

    I’ve just added another year to my squat timeline. Thanks gubmint!

    The Law of Unintended Consequences then must dictate that if you can’t boot a squatter in a timely manner, then why lend in the state at all? Pretty soon you’ll see banks adding State by State fee premiums to their rates. Loan in Texas – 4.5%, -0- points. Same loan in Cali? 5.0% for 1.0 point.

    I’m no fan of the banks. They aren’t suffering here. Only those who play by the rules are being punished.

    Let’s line up the banksters, the pols, their attorneys, and the squatters down along the Gulf of Mexico and push them into the water. Perhaps their absorbancy will help suck up the BP oil flow. Oh, snap! Greasy scum can’t absorb more grease. Perhaps a better idea will come later. Stay tuned.

    My .02c

    Soylent Green Is People.

    1. newbie2008

      You might be too optomist. The 450 days might be to the NOD and not actual FC/eviction. The latter takes at least a month. One property the NOD was filed middle of last year and has not been FC. Lots of postponed TS notices.

      On the percentage of deliquency for subprime borrowers, when actual FC takes place that property will longer counted in the deliquency pool. Thus the percentage of deliquency for subprime borrowers will go down. Also the new FHA subprime loans with 10% down are too new to default and they have 10% in the game.

    1. awgee

      And that happens often enough to write legislation? I seriously doubt that is what they are refering to.

  8. cara

    Did it really start the description with “Affordable” for a 1.25 million dollar price tag?

    Really? It was plenty affordable to the previous owner who could have used the HELOC’s to pay the monthly nut, but other than Ponzi financing I don’t see how “affordable” and over 1 million dollars go together.

    Maybe by that they mean small and lame for the neighborhood. (I’m not familiar enough to know)

  9. newbie2008

    It looks like more of the same …
    Make laws that are unclear and must be settled in court with unknown outcomes and the mood of the judge. Stimulus package for lawyers.

    As for recourse on errorous FC, it should be limited to those that paid but the banks refuses to correct the error such as crediting the wrong account, bank falsification on recept date, etc.

    I’ve had bank claim late cc payment which money was removed from my account but credited a week later. Lots of excuses, such as must be received at x processing location in z state instead of at local branch locations, must be received 1 week before due date to allow for processing time, our system had problems but you’re still responsible for the late fees … Took about 5 phone calls to correct that stituation. CA DMV was even worse.

    1. Misstrial

      Not exactly, however there are individual attorneys, bar associations, and attorney groups that are earnestly working towards the scenario you describe so well.

      Presently though, all courts must rely on prior case law, or stare decisis in addition to legistlative law and agency rules (if applicable) in order to make a decision or holding.


  10. ocwatcher

    “I wonder how he feels about that?”

    HE enjoyed every second of the housing bubble and even the aftermath. His house has made him almost 285K/year for 6 years (before 30% tax).

    after tax:
    640K cash + 560K (5% interest for 6 years on 1.88M) = 1.2M

    before tax:
    1.2/0.7 = 1.7M
    1.7M/6 = 285K/year

  11. tonye


    Beautiful portrait.

    Is that a Van Dyck? The light is really good, but are you sure it was copied correctly. The light on the man is brighter than that on the woman.

    The flemish in the 17th century truly advanced the art of humanist painting with very real portraiture that used light, color, texture and posing to capture the personality of their models.

    The Getty Museum has some pretty good paintings currently on display.

      1. tonye

        Well, since my mortgage monthly payment is so low, I could only save a bit so I have to do with copies.

        Now, if I had been smart, sold my house at the peak, moved to TRidge with a 100% loan, teaser rate and then had done a smart equity withdrawal, squatting for the last two years, I would be able to afford a couple of originals, huh?

        And I could fill up my wine cellar like the one in the house that Hannu Reddy was trying to unload for 4MIL in TRidge last year.

        Hmm… imagine how many cases of Château Pichon Longueville Comtesse de Lalande I could have stashed by now.

        A toast to Baccus and Van Dyck.

  12. matt138

    unrestricted HELOC withdrawal at 100% value still a legal possibility

    If a bank wants to lend 100% of value, let them. Get the govt out of it and let them find private capital to finance this crap. It is ludicrous that we need laws to make banks prudent. Get the god damn govt out of this and new laws will be completely unnecessary. Why is this so hard to see?

    This is socialist/fascist clusterf*ck and we’re all walking in circles mumbling to ourselves like winos drunk on malt liquor

  13. thrifty

    Nice to see that Cal senate bill 1178 has passed the senate and is sent to the Assembly. Seems fair to both the lender and homeowner in light of the original law on purchase money mortgages.

  14. Bill

    “Simple fairness dictates that no one should lose their home while they are in the middle of trying to save it…”

    Simple fairness also dictates that prudent people who saved up a responsible down payment and bought within their means don’t get the sh*t end of the stick.

    For those who’re genuinely fighting to keep a home they were qualified to buy in the first place: power to them. But such cases are rare given the debt-to-income ratios of the typical housing bubble purchase.

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