RealtyTrac Foreclosure Activity Report Released: Laws and Programs to Prevent Foreclosures Ineffective

Irvine, California-based online real estate company, RealtyTrac, issued a report on Thursday indicating that California's foreclosure activity jumped 81 percent in 2008, with one in every 54 households getting at least one filing notice. As reported by Reuters, the figure suggests that various state laws and private programs to slow the process have been ineffective.

"State legislation that slowed down the onset of new foreclosure activity clearly had an effect on fourth-quarter numbers overall, but that effect appears to have worn off by December," said James Saccacio, chief executive of RealtyTrac. "The recent California law, much like its predecessors in Massachusetts and Maryland, appears to have done little more than delay the inevitable foreclosure proceedings for thousands of homeowners."

Last month news reports indicated that the federal "Hope for Homeowners" program was also a flop. However, despite the glum news, there was a silver lining offered in the news, which was based on falling home loan rates in January. The drop in rates to below 5 percent has been brought on by the promise of massive government purchases of mortgage bonds. As a result, requests to refinance have risen, which could cut borrowing costs and help keep some borrowers in their homes.

The last resort of bankruptcy may soon also become a tool to combat foreclosure. Banks and the building industry have reportedly been working together with Senators on "cramdown" legislation affecting bankruptcy judges' powers regarding mortgage loan modifications. The rule change would give bankruptcy judges the power to change repayment terms for certain homeowners who declare bankruptcy. Below are some helpful links to information regarding foreclosures, the foreclosure process, recent legislation, and foreclosure laws by state.

• Reuters: Foreclosures soar 81 percent in 2008
• Bankruptcy Cramdown Mortgage Loan Modification? Key Banks Approve Possible Legislation (FindLaw)
• FDIC: Foreclosure Prevention
• Foreclosure Laws by State (RealtyTrac)
• Ten Tips to Avoid Foreclosure (FindLaw)
• ProPublica: Foreclosure 'Hope for Homeowners' Program Still Hopeless
• Frequently Asked Questions about Real Estate Law (provided by Law Office of Kimberly A. Abrams & Associates, P.A.)
• Mortgage Loan Modification Scams on the Rise (FindLaw)
• If You Are Behind on Your Mortgage Payments (FindLaw)