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After a slow simmer in the first part of 2011, mortgage foreclosures are heating up again. Problems arose in 2010 when it was discovered that some banks were doing so-called “robo-signing” in which lender employees used signature stamps on mortgage transfer documents that were never actually reviewed by high level bank employees or their attorneys. After resolving those issues in recent months, banks are now resuming home foreclosures at a rapid pace.By some estimates, about 1 million California homeowners will face foreclosure by the end of 2012. Another 800,000 may receive their first foreclosure notices, marking the beginning of the process. Adding the homeowner's stress, there seem to be few options for saving their homes. For many, the federal Home Affordable Modification Program has been a huge disappointment, helping less than 10 percent of homeowners in crisis obtain permanent modifications.Mortgage Scam Laws Do Little Without Teeth

According to fair housing advocates, state laws provide some help but do not do enough. While a law prohibiting agencies from charging up-front fees to help homeowners obtain loan modifications has been in place since 2009, budget cuts have crippled state agencies from enforcing it.

Mortgage scammers continue to work while the state grapples with the funding to stop them. According to the U.S. Treasury Department’s Financial Crimes Enforcement Network, California still leads the nation in mortgage fraud.

Until law enforcement catches up with scammers, the California Office of the Attorney General recommends following these five tips to avoid getting caught in one:

• Don’t pay any upfront fees to foreclosure consultants

• Don’t ignore letters from either your mortgage company or their servicing company

• Don’t transfer the title of your home to anybody else

• Don’t give your money to anyone who says they will pay your mortgage for you

• Don’t sign any paperwork without reading it

Remember, if something sounds too good to be true, it probably is.

Legislature Passes on Homeowner Protection Bills

Despite efforts of lawmakers to provide homeowners with additional protections this year, a series of measures have not been passed. Mortgage companies and banks are believed to be behind the bills defeat. According to ABC News, over $70 billion has been spent over the past four years by financial services companies to try and influence California lawmakers.

One bill would have required banks to pay a $20,000-per-foreclosure fee to the state to help cover costs. That bill might have slowed the pace of some foreclosures because lenders would want to make certain that foreclosure was necessary before paying the foreclosure fee.

Another bill rejected by the state assembly would have required counties to record foreclosure deeds within 30 days so as to make it clear who owns the property. Presumably, this would help lenders looking to sell foreclosed properties more quickly.

The final measure sought to force loan servicers to make a determination of whether a homeowner qualified for a loan modification before initiating foreclosure proceedings. Banking interests felt the measure would only delay an already protracted foreclosure process. Currently, a foreclosure in California will take over 300 days before it is finished.

Bankruptcy Options for Homeowners in Crisis

Homeowners facing foreclosures because they fell behind on mortgage payments or have been unsuccessful negotiation loan modifications may be wise to pursue bankruptcy. A bankruptcy attorney may help homeowners reorganize their mortgage arrears and pay the lender back through a bankruptcy plan. Some homeowners may even be able to eliminate second and third mortgages on their homes.

Others may be ready to walk away from their homes, but may be left daunted by the huge debts that would be attached to their former properties. Bankruptcy can help these homeowners as well. If you are facing foreclosure on your home, you should contact an experienced Los Angeles bankruptcy attorney as soon as possible to review your options. For many, bankruptcy is the quickest way to get a fresh start.

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