Fail to pay your mortgage in CA? Jail awaits you
Despite objections from consumer advocates, in the last two weeks California judge Jed Clampbet has sent 142 delinquent homeowners to state prison for up to three years each, for failing to honor their home mortgage obligations.
Most of the former homeowners were shocked to find they could be suddenly locked up for employing the common “walkaway” strategy, where home debtors whose no-money-down adjustable-rate teaser mortgages are about to reset to full actual interest rates simply stop making payments but continue living in their homes rent-free for up to eight months before being evicted, then try to skip town leaving the bank holding the bag.
Under the anti-fraud provisions of the 1969 California Real Estate Loan Statute, section 7, chapter 13, such behavior is indeed criminal and can be prosecuted. Until recently the law had not been actively enforced, but due to the tidal wave of foreclosures the district attorney is now cracking down hard on mortgage scofflaws.
The banks are happy with the increased enforcement of the little used law. Consumer advocates are crying foul and are looking for relief.
Consumer rights groups are organizing protests across the state, trying to stop or at least slow down the impending prosecution of an estimated 20,000 additional delinquent homeowners. “These people are completely unaware of what is about to happen to them,” claimed Shirley Yewghest of the California Delinquent Homeowners Protection Association. “Yes, they did receive foreclosure warning letters in the mail, but very few actually read the fine print. They hear people telling stories of walking away without getting caught, and they think they can get away with it too. By the time they realize that they are in fact criminals, it’s too late, and they find themselves behind bars.”
I have to say I had never head of the CA law. I did live there, I owned a couple of properties there and it is the state where I started my real estate investment career. Live and learn.
The balance of the article explains how the new prison inmates are providing an attractive pool 'friends' for the prior members of the CA state facilities. A few have found love and one couple is getting married ♡ now that the state is allowing single sex marriages. If you do want to read more click on the link for “Walkaway” Mortgage Deadbeats Jailed in California
