• Home
  • Bankruptcy in Brief
  • ABC’s of Bankruptcy
  • Considering Bankruptcy
  • True Stories
  • Chapter 13
  • Blog
  • About
  • TOC

Northern California Bankruptcy Lawyer

On The Bankruptcy Soapbox

The Soap Box
  • How bankruptcy works
  • Mortgage Matters
  • Consumer Rights
  • Newsworthy
  • You & Your Lawyer
  • Small Business
  • Family Law

California addresses foreclosure crisis

By Cathy Moran

California’s legislature passed changes to state foreclosure law that attempts to require dialog between an unpaid mortgage lender and a homeowner facing loss of his home.

SB1137 adds a requirement that the parties meet and discuss options to foreclosure before a notice of default can be recorded. Lenders must advise the debtor of the availability of HUD certified housing counseling.

What are the constraints on the advice HUD counselors can give? Can they suggest the borrower look for violations of applicable law in their loan transactions? Will they suggest Chapter 13 as an alternative to foreclosure? Do they have contact information for the loan modification staff at the lenders?

I applaud the California politicians who took some action on the problem. (Congress, Mr. Bush, are you listening?). My concerns go to whether any form of “counseling” will make a difference.

The typical problem is that the terms of the existing loan are simply beyond the capacity of the borrowers. The only solution is a modification that includes a fixed interest rate and often a forgiveness of interest or even principal. Otherwise, at the end of a longer foreclosure process, the bank is going to own another home.

More from the Soapbox

  • Protect Your Credit After Equifax Security BreachProtect Your Credit After Equifax Security Breach
  • Cancel card and enjoy convenience?Cancel card and enjoy convenience?
  • Behind the numbers of rising bankruptcy filingsBehind the numbers of rising bankruptcy filings
  • Means test:  don’t try this at homeMeans test: don’t try this at home
  • Life And Death of Debt In CaliforniaLife And Death of Debt In California

Filed Under: Strictly California

About Cathy Moran

I'm a veteran bankruptcy lawyer and consumer advocate in California's Silicon Valley. I write, teach, and speak in the hopes of expanding understanding of how bankruptcy can make life better in a family's future.

Chapter 13 available to more

About The Soapbox

You've arrived at the Bankruptcy Soapbox, a resource of bankruptcy information and consumer law.

Soapbox is a companion site to Bankruptcy in Brief, where I try to be largely explanatory and even handed (Note I said "try").

Here, I allow myself to tell stories and express strong opinions on how I think law should work for the consumer and small businesses when it comes to debt.

Moran Law Group
Bankruptcy specialists for individuals and small businesses in the San Francisco Bay Area

How Bankruptcy Works

What You Left Out Of Your Bankruptcy Schedules

One of the first questions a bankruptcy trustee will ask you at the hearing in your bankruptcy case is:  did you read the schedules before you signed them? The obvious, and expected, answer is YES. And if your answer is "yes", then the trustee can conclude that you stand behind the information that the … Read more

More Posts from this Category

643 Bair Island Road
Suite 403
Redwood City, CA 94063
Phone: (650) 694-4700
Phone: (650) 368-4700

Categories

All content copyright © Moran Law Group. All rights reserved.