Are California lenders obligated under law to accept home loan modifications?

You should work with a real estate attorney to remind your lender that it is acting contrary to California law.   California Civil Code section 2823.6 (effective July 8, 2008) now requires lenders of residential loans in California to accept loan modifications in most foreclosure situations.  The statute applies to all residential loans made from January 1, 2003 through December 31, 2007 that are secured by residential real property and are for owner-occupied residences.   It states that “a servicer acts in the best interest of all parties if it agrees to or implements a loan modification where the (1) loan is in payment default, and (2) anticipated recovery under the loan modification or workout plan exceeds the anticipated recovery through foreclosure on a net present value basis.”  In addition, the statute provides “that the mortgagee, beneficiary, or authorized agent offer the borrower a loan modification or workout plan if such a modification or plan is consistent with its contractual or other authority.”