Those 2008 second mortgages are coming back to bite people in the ***

[OSU Beavers]

 

[Fernando]

I saw that. PBS is informative. Fortunately, CA and some other states don't allow zombie mortgages to go after owners.
Maybe it was something Kamala Harris did when she was Attorney General. Forgotten hero.

 

[OSU Beavers]

In California, "zombie" second mortgages—long-dormant, old, or charged-off,,000 second liens—are actively resurfacing due to rising home equity, with lenders initiating foreclosures on homeowners. A 2025 California law (CCP 2924.13) now requires these lenders to strictly verify, serve, and certify loan documentation before proceeding, offering homeowners a new defense to challenge or negotiate these claims.
Key Aspects of California Second Mortgage Foreclosure
The "Zombie" Threat: Many second mortgages thought to be discharged, forgotten, or forgiven after the 2008 financial crisis were merely "charged off," meaning the lender stopped trying to collect but the lien on the home remained.
Trigger for Foreclosure: When property values rise enough to cover both the first and second mortgage, lenders (or debt buyers who purchased the old debt for pennies) see profit in foreclosing.
Legal Protections (AB 2424 & CCP 2924.13): As of 2025, this California law requires lenders to certify proper service and communication of the loan under penalty of perjury, creating a significant hurdle for debt buyers.
Statute of Limitations: While generally a four-year limit exists for filing a lawsuit to collect a debt based on a written contract in California, the secured lien on the property may still be enforced.
Steps for Homeowners Facing Foreclosure
Do Not Ignore Notices: Even if the debt is 10-15 years old, a,000 second mortgage can still lead to the loss of a home.
Request Information: Send a Request for Information (RFI) under RESPA to determine if the entity has the legal right to enforce the mortgage.
Seek Legal Assistance: Engage a qualified attorney to determine if the debt is "time-barred" (too old to sue, but sometimes still lien-enforceable) and to leverage new California laws to negotiate a settlement or challenge the foreclosure.
Explore Options: Consider a,000 short sale, loan modification, or,000 chapter 13 bankruptcy to address the debt.

 

[Fernando]

What California did about it: AB 130​

California enacted Assembly Bill 130, effective July 1, 2025, specifically to curb zombie mortgage foreclosures.

What AB 130 does:​

• Restricts enforcement of zombie second mortgages.
• Protects homeowners from foreclosure on loans they reasonably believed were forgiven.
• Requires servicers to certify that no unlawful practices occurred (including lack of communication).
• Applies retroactively in many cases.

This law is widely viewed as a consumer protection measure, but lenders argue it creates serious compliance hurdles and may chill the market for second-lien servicing.

 

[OSU Beavers]

Yea, those are 2025 California Bills, so Kamala had nothing to do with it.

What Kamala Harris did do when she was Attorney General was turn lawful citizens into instant felons overnight because they were low hanging political fruit while ignoring armed gangs.

 

[Fernando]

https://www.cnn.com/2024/10/21/politics/kamala-harris-big-banks-foreclosure-crisis/

Settlement becomes a career-defining moment for Harris​

When Harris became California attorney general in 2011, many states and several federal agencies had already been investigating abusive lending practices such as robo-signing, when banks routinely signed foreclosure-related documents without knowing if the facts were correct.

At the time, the US housing market was in disarray and Americans were defaulting on their mortgages and falling victim to foreclosure at extremely high rates.

In the fall of 2011, Harris walked away from the negotiations, claiming the proposed settlement was “inadequate for California homeowners.”

In her book, Harris recounts how she decided to speak directly to JPMorgan Chase CEO Jamie Dimon over the phone about the negotiations, a conversation that turned heated. The national agreement was finalized just weeks later.

The episode became a career-defining moment for Harris. A press release her office issued at the time said that before she had left the talks, California was expected to receive just $4 billion from the national settlement.

“I think she did hold out, and I think she improved the settlement as it pertained to California homeowners,” said Ira Rheingold, executive director of the National Association of Consumer Advocates.

Mortgage relief for homeowners​

As a result of the national settlement, mortgage relief was delivered to homeowners in several different forms, such as principal reductions, interest rates cuts, other kinds of loan modifications or short sales. There were also some direct payments sent to people who wrongfully lost their homes to foreclosure, according to the National Mortgage Settlement website.

Harris appointed a monitor – now-US Rep. Katie Porter, who was at the time a law professor at the University of California, Irvine – to make sure the banks complied with the terms.

The California agreement delivered about $9.2 billion to more than 84,000 homeowners by reducing the principal on their first or second mortgages, according to Porter’s 2013 report.

Another $9.2 billion went to short sales. Short sales don’t allow a family to stay in their home but do allow a homeowner to sell for less than the property is worth. If a lender approves a short sale, it agrees to forgive the difference.

The results allowed many families to stay in their homes, but in hindsight, wasn’t perfect.

“There was less principal reduction done here than should have been done. That has a lot to do with the way this (agreement) got structured,” Rheingold said.

New standards for mortgage lenders​

The settlement also set new servicing standards for mortgage lenders that, at the time, didn’t exist on a national level.

“From my vantage point, the real value of the settlement was that it introduced the first broad set of servicing standards for big banks and lenders,” said Lisa Sitkin, supervising attorney at the National Housing Law Project.

Sitkin said that in earlier years, it felt like the “Wild West” because there were no rules to protect borrowers when they were going through the foreclosure process.

The settlement, for example, put restrictions on a practice known as “dual tracking,” during which a mortgage servicer continued the foreclosure process while a struggling borrower was applying for a loan modification.

The new guidelines were a precursor to federal regulations later created by the Consumer Financial Protection Bureau.

The standards also helped pave the way for the California state legislature to pass a Homeowner Bill of Rights, creating more protections for homeowners.

“It was only when then-AG Harris put the weight of her office behind the efforts that we were able to get a Homeowner Bill of Rights passed here in California,” said Sitkin, who along with other advocates had spent years pushing for state standards.

 

[OSU Beavers]

Again, nothing to do with the current wave of second mortgage foreclosures. Every AG was going after robo-signers post 2009. They would be remiss in their duties if they didn't.

Despite the kneepad promotions, I agree that she did have a base level of competency and could deliver a good speech. I don't know what happened in 2020 to turn her into a cackling idiot? Day drinking?