California House Foreclosures - House Foreclosures in California

Moratorium On Foreclosures Sought In California

February 22nd, 2008

A letter has been sent to the Bank of America from 91 organizations in California asking for a cessation of those foreclosures listed under BofA and Countrywide. In a $4 billion deal BofA is buying off Countrywide in the third quarter.

This will make BofA the largest mortgage giant in the country.

BofA is proceeding with the take over despite the fact that the foreclosures under Countrywide are doubling. On its 9.02 mortgages the foreclosure rate rose to 1.48% last month from 0.77% a year ago. Delinquency rate increased to 7.47% from 4.32%. Last month Countrywide sanctioned $21.9 billion mortgages – a decrease from $37.1 billion since a year ago. A third of its sub-prime mortgages were in the delinquent stage in the end of December 2007. In the fourth quarter Countrywide lost $422 million.

The community groups want BofA to keep on hold foreclosures and modify loans that are at risk by converting them to fixed rates prime loans with an interest not above 6% stretched over a period of 30 years. They want BofA to keep the headquarters of Countrywide in Calabasas and its loan servicing centre in Simi Valley.

BofA spokesperson said that talks are on with various units regarding negotiations. The aim of the company is keep as many as possible free from foreclosures. Project Lifeline will help those who have gone delinquent on their payments and are in arrear for more than 90 days. Lehe borrnders will have to find out if towers are in a position to continue under the new conditions. The project covers all types of house loans and is an extension of the previous plan of Hope Now. Project Lifeline is supported by US Treasury and HUD.

Countrywide together with Association of Community Organizations (ACORN)have come forward with a specific programme. It increases the previously announced fund of $16 billion. It targets those borrowers who have been always current in their repayments but cannot now cope with the reset rates. More alternatives are offered to those who are lagging behind – short term repayment plans, loan modifications, interest rate freeze or a roll back to the pervious rate as well as reductions in interest rates.

A group – California Reinvestment Coalition presses for the right of those who belong to minority groups and have modest incomes to have equal access to prime banking and other facilities.