New Law Cancels California Foreclosures

by 14 Nov 2012
Lenders cancelled 62.1 percent more California foreclosures in October than September as they prepare to comply with a new state law that takes effect January 1 requiring them to cancel foreclosures proceedings on properties for which a short sale or loan modification is being considered. Cancellations are up 36.7 percent over a year ago, according to ForeclosureRadar , which reported the month over month increase in cancellations to be the largest since it started tracking foreclosures in September 2006. California’s new Homeowner Bill of Rights law includes a provision outlawing the practice of foreclosing on properties at same time they are being considered for either a short sale or loan modification.  It requires that  prior to January 1 lenders cancel any foreclosure on a loan for which a short sale or loan modification is being considered. “The California Homeowner Bill of Rights that takes effect in January 2013 is beginning to impact foreclosure trends. This is another example of where changes in foreclosure trends are driven by government intervention, and not necessarily economic recovery. While the impacts are still unclear, the elimination of dual tracking may avoid some unnecessary foreclosures, but will lengthen the foreclosure process and delay ultimate recovery. Expect further impacts to foreclosure trends in the months ahead," said ForeclosureRadar Founder and CEO Sean O’Toole. In California, new foreclosures were also down 8 percent from the prior month, and down 48.9 percent compared to last year. October 2012 California Foreclosure Sales were up 9.3 percent from the prior month, but down 38.9 percent from the prior year.


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