January 12, 2009

Assembly Report

Foreclosures continue to rise in Valley

By Assemblymember Jim Beall, Jr.
Special to the Times

“For Sale” signs in front of homes have become an all-too-common sight in Silicon Valley neighborhoods, the telltale calling cards of foreclosed properties and families in distress.

In response, the Legislature passed a new law in July that requires lenders or mortgage services to give 30 days to borrowers before a notice of default is issued. This law specifies that the mortgage entity or service meet with the borrower to explore options to avoid foreclosure. It also provides that tenants of rental units that are in foreclosure be given 60 days to move out instead of the previous 30-day limit.

The law gives borrowers a last-ditch opportunity to sit down with their lender, face-to-face, to discuss the possibility of restructuring their loan. But waiting until the 11th hour to act is not in your best interests, experts say. The sooner you act and talk to your lender, the better.

Here in Santa Clara County, foreclosures increased by 39 percent in November, according to local news reports. The reasons for falling behind in mortgage payments are many, said Alix Stayton of Operation Hope a nonprofit organization that provides free advice and assistance to people facing foreclosure.

Half of the clients who have sought help from Operation Hope reported experiencing a medical hardship that caused them to either lose their job or go on disability, forfeiting not only income but their health insurance, too, Stayton said.

Other clients said they lost their jobs in the wake of the recession. And there is a third group, she said: non-English speakers who did not understand the terms of the documents they were signing be-cause it was never clearly or fully explained to them.

Stayton supplied these basic tips for people to follow when dealing with foreclosure:

—Open your mail – it is your lender’s primary method of contact with you.

—Contact your lender or mortgage service as soon as problems occur.

—Be persistent. “If you’ve already talked to a lender and the lender turned down the accommodation or modification, don’t give up,’’ Stayton said.

—Don’t abandon the home. Some contracts with lenders mandate that the owner occupy the home before they will make modifications.

—Maintain your perspective and health. “Do everything within your power and focus on things you can control,’’ Stayton said. “Exercise, eat right, and take care of your children, and participate in the family’s life.’’

—Seek guidance from an approved certified foreclosure prevention counselor.

Phone the U.S. Department of Housing and Urban Develop-ment — (800) 569-4287 or TDD (800) 877-8339 or visit www.hud.gov – for the names of federally approved housing counseling agency. Counselors can help you understand your financial condition and your options, and help you negotiate with the lender. These services are generally free.

Authorities have warned consumers to beware of bogus counseling agencies that charge a fee but provide scant advice – advice that is already free from HUD-certified counseling organizations. Beware of groups or individuals who ask you to sign over the title of your home to enable them to negotiate the mortgage, or pay the mortgage, or sell the home on your behalf.

Jim Beall Jr. is a member of the California State Assembly, representing the 24th District, including Willow Glen, Campbell, South San Jose, West San Jose, Saratoga, and portions of Santa Clara, Los Gatos, and North San Jose.