I thought I would give you an update on what I am seeing in foreclosures. This mainly applies to California families, but attorneys I know in other states are telling me similar things. A few of the lowlights:
- Banks are getting more aggressive on collecting money on recourse loans. If you have a recourse loan, they are coming after you for the money.
- Banks are attempting to collect on non-recourse loans as well. The banks really are pushing to get the money – even if it is not owed and people are paying it.
- Foreclosed homeowners are having a difficult time finding a place to rent.
- The number of “predators” trying to get money is going up. I have talked to people who are being called by non-lawyers who are offering loan modifications.
However, compare this to the highlights:
- Banks are willing to negotiate on loans. You may need some help, but they are willing to work with you.
- Principle and interest adjustments are possible still. You may be able to get the home value lowered and the interest rate frozen at the same time.
- Banks are asking people to agree to stay in the home for a certain number of years. This is actually good news. The last thing this market needs is more speculation. By forcing people to stay in their homes, it creates stability in the marketplace.
A few things to remember.
An attorney cannot solicit you. Thus, you will never get a call from an attorney offering to help you. It is only non-lawyers who do this. They are receiving notices of default and calling those homeowners. Do not fall for this and do not let them bully you. If they are calling you, it is a sign, in my opinion, that they are desperate for work.
Also, if you get an agreement with your bank, put it in writing! And make sure they sign it as well. This will protect you in the future!