An additional 90 days has been added, is some cases, to the length of time for a homeowner to cure a default in mortgage payments. The California Foreclosure Prevention Act went into effect on June 15, 2009. This bill extends the current 90 day period between notice of default and notice of sale to 180 days.
Unfortunately, the law is limited in its application to a principal residence occupied by the borrower at the time of the default and only if the loan is the first lien against the residence and was recorded between January 1, 2003 and January 1, 2008.
A mortgage loan servicer can apply to the California Real Estate Commissioner for an exemption to this law (reducing the time period for cure back to 90 days) if they have implemented a loan modification program with specified features. Once the Real Estate Commissioner concludes that the program meets the necessary requirements, the mortgage loan servicer will receive a permanent exemption.
What this means for homeowners is that, under the above circumstances, and if the holder of their first deed of trust hasn’t received an exemption, the homeowner has 6 months from the notice of default to modify the loan, refinance, sell the home or otherwise cure the default.