Heads Up: Foreclosure is still a reality for many homeowners

The foreclosure crisis is not over. In Alameda County alone there are *1253 of your neighbors whose houses are either going to be auctioned on the courthouse steps, or have notices of default on them as of the first week of this New Year.

And there is more bad news. Just when we thought all of those toxic first loans were finally getting back on track, a second wave of problems is on the way with the equity lines that are all coming due.

That is not quite as many as the preceding years but still quite a few. As the economy slowly recovers and the real estate market follows in its wake, a number of you have forgotten just how bad the real estate bust was. Some, investors mostly, are looking back over the past four or five years with a sense of nostalgia because they made so much money off the misfortune of others.

It was a terrible time and in response to the outrage of the homeowners nationwide some protections were put in place to ensure a more fair foreclosure process and some ground rules for servicers.

California’s Attorney General, Kamala Harris, in response to the mortgage crisis in California implemented a three point plan. The Mortgage Fraud Strike Force was created in May 2011 to investigate and prosecute misconduct at all stages of the mortgage process. In February 2012, Attorney General Harris secured a commitment from the nation’s five largest banks for up to $18 billion for California borrowers. January 1st of 2013, the Homeowner’s Bill of Rights was enacted.

On June 23, 2010, California received approval to develop unique foreclosure prevention proposals with Hardest Hit funding. California was ultimately awarded nearly $2 billion in funds to help eligible California homeowners avoid preventable foreclosures.

California’s programs, which are collectively called Keep Your Home California, were established in collaboration with many community associates, foreclosure counselors, housing activists and others directly involved in helping struggling homeowners.

Keep Your Home California’s website states that, “So far, 33,250 Californians have been eligible for at least one of our programs.” You can read some of the success stories on the testimonial page of KYHC’s website. The stories are touching, true, documented and more importantly free of charge.

Recently a couple of my friends, my clients sooner or later turn into my friends especially when we are going through something as stressful as trying to save their home foreclosure, applied for and were approved by KYHC. Imagine my surprise when the program actually worked and two of my clients were approved, both, for a principle reduction program grant of $100,000.00.

They were both ecstatic and I was very happy for them both.

My clients that are in a rough spot with their properties being in default or underwater become my friends because I care about what happens to them. I always tell my clients the last thing I want to happen is they get foreclosed on by the bank and the second to last thing I want to do is short sale their home. We really exhaust every option prior to short selling a home and so when KYHC really rolled out I, of course, added it to my list of options for people to check out.

Unfortunately some problems cropped up and both of them, while still approved through Keep Your Home California, are having a difficult time getting their servicers to accept the money. Which leads me to a little refresher course on banks and loans in default.

Join me next time and we will shed a little light on the big business that is distressed property and how a mathematical formula determines who gets to keep their home.

Have a story to share about Keep Your Home California or your experience with a short sale or foreclosure? I want to hear about them.

If you have any other questions, or want to share your story, please reply to this post, contact me via my website, my facebook page, or on Twitter @AmericaFoy.

* Statistics courtesy of Foreclosureradar.com