Why is California loan modification so popular? The home loan crisis that triggered this entire economic implosion is to blame for most of our problems. The real estate industry, particularly in California, has collapsed due to people’s greed. Lenders continued to lend to anyone without considering risk factors, and real estate continued to sell and develop more areas. As a result, the debt that remains unpaid grew and grew. The economy ran on the illusory wealth created by debt. But soon, of course, all these bad debts caught up with the system and soon the banks collapsed because there was no more cash to support them. And as everyone knows, perhaps the biggest industry in California is the real estate industry. And since that’s gone, the government is trying to come up with new ways to revive it in the hope that reviving that industry will eventually help revive the entire economy that collapsed because of it in the first place.
As such, a new California civil code was created last year. This is called civil code 2923.6. Basically, what this California code does is it requires banks and private home loan lenders in California to accept loan modification applications in almost all situations where foreclosure is imminent. Therefore, if you have a mortgaged home in California that you purchased between January 1, 2003 and December 1, 2007, you may be eligible for this program. For those who don’t really know what a loan modification is, it’s basically a permanent change in the terms of the loan. These changes, such as lower interest rates as well as time extensions, are intended to help the borrower pay off their mortgage despite their financial problems.
There is also a federal program created by President Obama, the famous Obama bailout program that creates incentives for every lender in the nation every time they successfully approve a loan application modification. However, this statewide action by the California government is proving to be a much more effective solution to the problem that is really trying to resuscitate the economy by addressing the root of the problem. It is aimed at the long-term goal of improving the economy, and while it may be small, analysts are seeing real incremental improvements in the state’s economy.
All Californians should be aware of this new law. Of course, this law does not condone the abuse of mortgage payments. It only makes it more affordable for borrowers facing foreclosure. For those who really want their app to work, a good tip is to consult a loss mitigation expert.
It should also be noted that one does not have to be behind on their mortgage payments to have a California loan modification. Even those who are still on time with their payments can still talk to their lender about a modification if they see that they are in financial jeopardy.