Calif. Jobless Rate Likely To Spur More Foreclosures

Lawmakers weigh add'l action

LOS ANGELES (CBS) — As long as unemployment stays high in California, more people will likely be forced out of their homes by foreclosure, a state panel warned on Monday.

KNX 1070’s John Brooks reports state assembly committees on Judiciary, Banking and Finance, and Housing and Community Development held a joint hearing in Los Angeles to find out if the state government can or should do more to help people in danger of losing their homes.

Kurt Eggert, a law professor from Chapman College, told the committees that while many states require lenders and mortgage providers to file foreclosures in court, California does not.

Homeowners instead get a chance for mediated loan modifications where the lender doesn’t have to prove its case.

In the last 3 months of 2010, more than 35,000 homes were repossessed by lenders statewide — a 31 percent drop from just one year ago.

(©2010 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)

  • moral_threat

    and how many of these people simply walked away from their homes since the banks would not even consider dropping their interest rates? I personally know a few people that walked away from their homes simply because they were upside down and wanted an interest rate reduction, not a principal reduction. They could afford their home but why should the banks care about the people that can pay their bills. The banks fall all over themselves to help those that stop paying their mortgages all together and give them rate & principal reductions.

  • swhitS

    Moral threat – You have some very lopsided info. Banks have foreclosed on people who owned their homes outright and where their mortgages were with other loan companies not even affiliated. You think people like that are for the people? Dream on!

  • NotHappy

    I lost my house last year because I could no longer afford the payments after my divorce. I was upside down on my mortgage and did everything I could to work with the bank and find buyers for a short sale. I found two or three interested buyers which saved my house from being forclosed once. But the bank decided to sell my house the second time around at a foreclosure sale and chose to ignore the buyer offers on the table. Apparently the bank did not have enough time to review the offers. My realtor who also worked hard to find a buyer was not happy.

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