What is AB284 and What Does it Mean for Homeowners?

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Recently I got asked the question about what is AB284, so I thought it would be a good time to clear up some misconceptions people have about this new state law.  In short, AB stands for assembly bill.  This new state law took effect on October 1, 2011.

The new law requires that any notices of default include an affidavit that also includes information regarding the deed of trust, the amounts due, the possession of the note and deed of trust, and the authority to foreclose.  Lenders who fail to comply are subject to civil penalties.  Anyone making false representations concerning property title are also subject to a class C felony.

Obviously, this is big news and has slowed down the notices of default that have been filed in our county.  In fact, it slowed it down so much that there were only about 55 notices of default filed in October. When you compare that with the preceding months where more than 3000 defaults were filed each month, you can see that there's a huge difference.

There is No Free Lunch Folks

Unfortunately, many people are under the mistaken assumption that this means that they can default on their mortgage loan and then live in their house for free as long as they want.  This is not the case.  Although the new law will slow down foreclosures for a few months until the banks get their acts together, you can better believe that they will find a way to comply with these new regulations and get the foreclosures moving again.

You see, right now banks are scrambling to make sure that they get their paperwork together so that they can continue with the process of issuing defaults.  But what does this mean for homeowners right now?

There is a Silver Lining for Homeowners Who Hurry

If you are a homeowner who is teetering on the edge of default, this opens the opportunity for more short sales right now.  Lenders who were previously not interested in working with owners are going to be much more inclined to do so since they can't follow through with foreclosure is easily right now.  Now is the time to take the chance on working on a short sale with your lender.

You can start healing your financial picture right now so that you can buy again in the future.  This might be the time to get things squared away so that you and your family can move forward without worrying about being foreclosed upon.

Don't make the mistake of listening to some of these hyped up attorneys that are trying to convince people they can live in their homes free of charge for years and years.  That is simply not the case.  Remember the banks have millions of dollars invested and will solve this crisis soon.  I estimate about 90 days before banks will have it figured out, so time is ticking for sure.

I would love to speak with you about your current situation to see if a short sale would be a good option for you.  Give me a call today so that we can start healing your financial picture.