New Foreclosure Timeline for California Residential Loans Subject to Reg X & Reg Z
Last month an article was posted highlighting new mortgage rules going into effect January 10. The new Federal rules modify existing Regulation X (Real Estate Settlement Procedures Act—RESPA) and Regulation Z (Truth In Lending Act—TILA) and are being implemented under the Dodd-Frank Act. Delinquencies on residential loans subject to Regs X & Z (covered loans) are subject to new procedures and timelines that reformat the early stages of the collection process when covered loans go delinquent.
The chart below shows minimum timelines required for covered loans in California. Clicking on the chart will take you to a slide presentation that shows each step and the regulatory language associated with it.
This presentation shows timelines and by no means covers the many details of procedures that are to take place within each timeline. “Dual Tracking” is not allowed and the lender must consider all reasonable loss mitigation alternatives before an application can be denied. Links are provided to the Federal and State websites where the regulations are posted in their entirety.
Communication with the borrower, as prescribed, and file documentation are two of the many important elements in avoiding citations for noncompliance.
NOTE: The new Federal Regulations have not yet been incorporated in the main text of 12 CFR 1024, but are posted as supplements at the bottom of the main text. Links will take you to the new text and to the Federal Register.
Robert Wenger has worked in banking and real estate finance since 1972, serving clients in California, Oregon, Nevada, Utah, Arizona, Colorado, Kansas, Nebraska and Hawaii. During his career, Mr. Wenger has been responsible for originating and servicing agricultural loans and managing over 100,000 acres of agricultural property for an insurance company, managing a $450 Million special asset portfolio for a niche lender and managing special assets and loan operations at three community banks. Mr. Wenger is a California real estate broker and has provided expert witness services in the areas of banking, real estate finance and agriculture for the past 10 years and has instructed home buyer education classes for the past 7 years.