In a new report released May 20, the California Reinvestment Coalition documents mistakes and deficiencies in the performance of mortgage servicers. These failures cause unwarranted foreclosures, particularly in the “hardest hit” communities which feature low income households and those with limited English proficiency.


Keep Your Home California is a program that makes financial payments to help eligible California homeowners avoid foreclosure.

One homeowner was recently helped by Surepath Financial Solutions, one of the Foreclosure Help agency partners. This San Jose homeowner fell behind in her property tax payments after a long period of unemployment. When her lender learned about the property tax arrears, it paid the taxes and then sought to collect the arrears from her. The lender began the formal foreclosure process when the homeowner could not afford to pay the arrears. Meanwhile, the homeowner had found new employment, but without intervention from Keep Your Home California to pay the arrears, she would have lost her home to foreclosure.

Surepath submitted a Keep Your Home California benefit request under the Mortgage Reinstatement Assistance Program on behalf of the homeowner. This program, known as MRAP, provides a one-time payment of up to $25,000 to homeowners who are at least two payments behind on their mortgages but who can demonstrate current financial stability. In this case, MRAP paid all of the property tax arrears. With this help, the homeowner was able to maintain her current mortgage payments, and reached agreement with the lender to handle future property tax payments.

Not every homeowner facing foreclosure will qualify for Keep Your Home California benefits, but the Foreclosure Help Center can refer homeowners to counselors who will assess individual eligibility and make applications for benefits if appropriate.


According to a recent article in the Housing Wire, the answer is “yes”!  Traditionally, non-judicial foreclosure has been the approach preferred by California lenders and servicers.  This approach eliminates court oversight of the process, and restricts the rights of homeowners to assert defenses to the foreclosure.  However, abuses of this process by lenders and servicers produced the California Homeowner Bill of Rights.  This law imposed limitations and protections on this process to eliminate dual tracking, robo-signing, and other abuses.

According to this article, seeking to foreclose through judicial foreclosure which utilizes a legal action filed in the state court, eliminates the protections and procedural requirements now in place for non-judicial foreclosure under the HBOR.  To read the full article, see,

Despite the predictions in this article, our Foreclosure Help Center in Santa Clara County has not seen evidence of this trend.  Also, the new federal Consumer Financial Protection Bureau Regulations offer similar protections to homeowners regardless of whether judicial or nonjudicial foreclosure is utilized.  To read the Housing Wire article, see:


California law prohibits any person or company from collecting advance fees to help negotiate mortgage loan modifications.  This law, California Civil Code Section 2944.7, applies to realtors and attorneys. Despite this law, homeowners are still paying thousands of dollars to these scam artists who collect and then fail to perform or even disappear.  The lender or servicer holding the mortgage is proceeding with foreclosure, while the homeowner assumes the scam artists are protecting them.

The Santa Clara County District Attorney has actively pursued these law breakers.  Two recent cases brought by the DA’s Real Estate Fraud Unit illustrate the harm caused by these illegal practices.

In one case, the co-owners of M & R Contemporary Solutions, pled guilty to theft and foreclosure fraud charges related to a phony scheme that bilked approximately 400 mainly Hispanic homeowners of close to $2 million over a one year period.  Homeowners paid fees in the range of $3000 to $10,000 based on promises to save their homes, only to receive no help.

In another case, real estate agent Michael Mendoza was charged with six separate counts of collecting illegal fees and using unlicensed agents.  He and his company advertised widely, particularly on Spanish language radio and television stations throughout the Bay Area.

Even though the California law prohibiting advance fees has been in place since 2009, the Foreclosure Help Center continues to receive calls from homeowners who have already paid these illegal fees.


Free counseling from a HUD-approved agency is available through the Foreclosure Help Center.  Call the Center at 408-293-6000.

If you have paid an illegal advance fee, you can follow up with the District Attorney’s Real Estate Fraud Unit at




Foreclosure rates in Silicon Valley are not dramatically better than those in other Northern California areas.

Silicon Valley has an image as an economic powerhouse, with high levels of employment and increasing home values. However, the foreclosure rate for the metropolitan area that encompasses Silicon Valley is not noticeably lower than the rates for other areas considered to be hard hit by the foreclosure crisis. A report just released by the Foreclosure-Response organization provides the foreclosure rates for all 366 U.S. Metropolitan areas as of September 2013. Full report. The current foreclosure rate for the San Jose-Sunnyvale-Santa Clara Metro area is 2.3%, which is the same rate calculated for the SF-Oakland Metro area.  The Silicon Valley rate is just below the 2.4% rate for Chico, the 2.5% rate for Bakersfield and the 2.7% rate for Sacramento. The rate for Modesto is 3% and Stockton is 3.1%. None of the rates in these hard hit areas are dramatically higher than Silicon Valley.

The report also measured the improvement in the “serious delinquency” rate since the height of the foreclosure crisis in 2009. Serious delinquency is defined as 90 or more days delinquent. The improvement in the delinquency rate in Silicon Valley is actually less than the improvement in other metro areas. The San Jose Metro area serious delinquency rate in December 2009 was 7.8%. It is now 4%. In contrast, the serious delinquency rate for Stockton dropped from 18.5% to 6.1%. In the Modesto Metro area, the delinquency rate fell from 17.3 to 5.8%. As is true in the comparative foreclosure rates, the current delinquency rates in all three of these areas are now similar, contrasting with the sharply higher delinquency rates for these other areas in 2009.


As we all know, the mortgage scam artists constantly invent ways to attract paying customers. Here is a new one to avoid.

Several laws protect homeowners facing foreclosure by requiring lenders and loan servicers to give the homeowner a “single point of contact” within their organizations. This protection is crucial to prevent harmful lender practices such as dual tracking and misplaced modification applications.

We have now learned that profit-motivated third parties are contacting homeowners and leading them to believe they are the point of contact for the lenders and servicers who hold their mortgages. They are asking for private information from the homeowners, and may ultimately ask for fees. As a minimum, this scam activity can confuse homeowners and lead them to waste time that should be spent contacting legitimate representatives.
Homeowners should never deal with someone directly calling who is claiming to be a point of contact.

A legitimate point of contact representative should be identified in an official letter from the lender or servicer, with appropriate contact details included.

This type of scam is another good reason to contact a HUD-approved counseling agency. That agency can communicate with the lender or servicer to verify the point of contact representative and to submit the homeowner’s personal information safely and confidentially. A homeowner who is contacted by one of these scam artists should report the contact to his or her counseling agency, a non-profit legal services agency, or the local district attorney.