by El Reportero staff
The Homeowner Bill of Rights, designed to protect homeowners and borrowers during the mortgage and foreclosure process, was signed into law today by Governor Edmund G. Brown Jr, announced Attorney General Kamala D. Harris.
The Homeowner Bill of Rights prohibits a series of inherently unfair bank practices that have forced thousands of Californians into foreclosure. The law restricts dual-track foreclosures, where a lender forecloses on a borrower despite being in discussions over a loan modification to save the home. It also guarantees struggling homeowners a single point of contact at their lender with knowledge of their loan and direct access to decision makers, and imposes civil penalties on fraudulently signed mortgage documents. In addition, homeowners may require loan servicers to document their right to foreclose and borrowers can access courts to enforce their rights under this legislation.
According to Attorney General Harris, these laws “will give struggling homeowners a fighting shot to keep their home”, adding that they “will benefit homeowners, their community, and the housing market as a whole.”
“These new rules make the foreclosure process more transparent so that loan servicers cannot promise one thing while doing the exact opposite,” said Governor Brown.
Senator Ron Calderon (D-Montebello) and local leaders praised this signature. “Today is a historic day for California. We have put the seal of the State in the protection to working families against the unfair practices by some lenders during the mortgage crisis”, said Calderon in a statement.
However, anti-foreclosure activists warned Wednesday’s signing of the “Homeowner Bill of Rights” by Gov. Brown is not “acceptable” because the protections touted by the legislation won’t go into effect until 2013 – and hundreds of thousands of homes in the state are at risk of foreclosure before then. CJ Holmes, a real estate professional and founder of Home Owners For Justice, a non-profit organization designed to help homeowners demanded a foreclosure moratorium.
According to her, there are more than 70,000 homes and condos scheduled for foreclosure auction in the next 30 days and more than 400,000 owners of homes and condos are at risk of foreclosure loss between now and January 1st, 2013, when the legislation is set to go into effect. “The people of this State deserve protections now. We petition the Governor to stop foreclosures until the legislation to protect us becomes law”, stated CJ Holmes.
The Homeowner Bill of Rights consists of a series of related bills, including two identical bills that were passed on July 2 by the state Senate and Assembly: AB 278 (Eng, Feuer, Pérez, Mitchell) and SB 900 (Leno, Evans, Corbett, DeSaulnier, Pavley, Steinberg).
The Homeowner Bill of Rights builds upon and extends reforms first negotiated in the recent national mortgage settlement between 49 states and leading lenders. Attorney General Harris secured up to $18 billion for California homeowners in that agreement, and has also built a Mortgage Fraud Strike Force to investigate crime and fraud associated with mortgages and foreclosures.
