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The freeze on foreclosures affects owner-occupied homes, and those homes and those that have their first mortgage recorded between January 1st, 2003 and January 1st, 2008.
A South San Jose home with its manicured lawn is in danger of being bank owned. Ana Rosales is the homeowner fighting foreclosure.
"It's really bad emotionally where I have been getting sick a lot because I am frustrated," said Rosales.
The California Prevention Foreclosure Act is designed to help thousands of people like Rosales.
The act imposes a 90-day moratorium on foreclosures in California. The goal is to force all lenders to get a comprehensive loan modification program in place.
"There's thousands and thousands of people who are trying to get modifications who deserve modifications that can't get through the system, so perhaps this will help that out," said Quincy Virgilio from the Santa Clara County Association of Realtors.
Assemblyman Ted Lieu sponsored the legislation which takes effect on Monday.
"The goal is to get the monthly payment to between 31 percent and 38 percent of a person's monthly income. If we could do that, we could help keep a lot of people in their homes," said Lieu.
But here's the loophole, most major lenders do have loan modification programs in place and because of that, they are applying for and will likely get exemptions to the foreclosure moratorium.
Leon Huntting is past president of the California Mortgage Bankers Association. He said people without jobs will find it almost impossible to qualify for a loan modification and that is a growing part of the foreclosure crisis.
"Until we can handle the employment issue also we're going to see significant numbers going into default and foreclosure," said Huntting.
The Foreclosure Prevention Act however does put added pressure and scrutiny on banks and lenders to work with people like Rosales. Ironically the home next door to hers is bank owned and that is a fate she is desperate to avoid.
"It means a lot to me and to my husband and my family," said Rosales.
Banks and lenders should have many elements to their comprehensive loan modifications program including reducing the interest rate, even writing down the principle and extending the loan agreement itself.
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