Much electronic ink has been spilled about the latest foreclosure moratorium in California. While I agree that foreclosure moratoriums in general will not "keep borrowers in their homes" and simply delay the inevitable, this particular bill is much ado about nothing.
Looking at the text of the bill, there are exemptions granted to financial institutions that have foreclosure prevention plans in place:
SEC. 4. Section 2923.53 (a): A mortgage loan servicer that has implemented a comprehensive loan modification program that meets the requirements of this section shall have the loans that it services exempted from the provisions of Section 2923.52, upon order of the commissioner. A comprehensive loan modification program shall include all of the following features:The bill does not require that any modifications actually take place, only that the institution has a program. Helpfully, the three California regulators of financial institutions have set up web sites that track exemptions to the moratorium. Here they are for future reference:
(1) The loan modification program is intended to keep borrowers whose principal residences are homes located in California in those homes when the anticipated recovery under the loan modification or workout plan exceeds the anticipated recovery through foreclosure on a net present value basis.
Department of Financial Institutions
Department of Corporations
Department of Real Estate
And for the curious, here is a list of financial institutions that have already been granted exemptions. Some pretty big names:
AMERICAN HOME MORTGAGE SERVICING, INC.
BAC HOME LOANS SERVICING, LP
BANK OF AMERICA, NA
CARRINGTON MORTGAGE SERVICES, LLC
CHAMPION MORTGAGE COMPANY
NATIONSTAR MORTGAGE LLC
CHASE HOME FINANCE LLC
EMC MORTGAGE CORPORATION
GMAC MORTGAGE, LLC
HOMECOMINGS FINANCIAL, LLC
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
KONDAUR CAPITAL CORPORATION
PENNYMAC LOAN SERVICES, LLC
SELECT PORTFOLIO SERVICING, INC.
SELENE FINANCE LP
U.S. BANK NATIONAL ASSOCIATION
VERICREST FINANCIAL, INC.
WELLS FARGO BANK
OneWest Bank, FSB
First Federal Bank of California, FSB
Fresno County Federal Credit Union
Christian Community Credit Union
Provident Credit Union
First Entertainment Credit Union