Bill of Rights Passes for Struggling Homeowners

Gov. Brown today signed a set of bills aimed at protecting homeowners, but critics contend that it will only delay the recovery of the housing market.

Gov. Jerry Brown today signed two pieces of legislation collectively known as the California Homeowner Bill of Rights, which supporters contend will protect struggling homeowners and borrowers during the mortgage and foreclosure process.

The legislation, which will take effect Jan. 1, prohibits ``dual tracking,'' in which a lender forecloses on a borrower while reviewing a homeowner's application for a loan modification. The law also guarantees a single point of contact for homeowners negotiating a loan and expands notice requirements that must be provided to a borrower before taking action on a loan modification application or pursuing a foreclosure, according to the governor's office.

``These new rules make the foreclosure process more transparent so that loan servicers cannot promise one thing while doing the exact opposite,'' Brown said.

The laws also allow injunctions against foreclosure until violations are corrected and permit civil penalties against servicers that file multiple, inaccurate mortgage documents or commit reckless or willful violations of the law, according to backers of the legislation.

``The California Homeowner Bill of Rights will give struggling homeowners a fighting shot to keep their home,'' said Attorney General Kamala D. Harris. ``The legislation will make the mortgage and foreclosure process more fair and transparent, which will benefit homeowners, their community and the housing market as a whole.''

But Assemblywoman Diane Harkey, R-Dana Point, told the San Francisco Chronicle the legislation won't help homeowners, and the ``only people who will make money is attorneys.''

``California communities are starting to bounce back, and the longer you delay recovery from the housing market, the longer property tax revenues will continue to decline,'' Harkey said.

The bills were also opposed by large banks, the California Chamber of Commerce, title companies and Realtors.

According to state officials, the new laws make California the first state in the nation to take provisions in the National Mortgage Settlement, which covered the nation's five largest mortgage loan servicers, and apply those rules to all mortgage servicers.


Will the Homeowners Bill of Rights help or hinder homeowners?

 - City News Service

Emily Knell July 12, 2012 at 03:16 PM
It's going to hinder. The be all, end all, answer to housing recovery is for there to be a law that simply states this: "Any homeowner who applies for a loan modification shall be Approved or Denied in NO MORE than 60 days, Trial Loan Mod payment plans will not be allowed, lenders must review a borrowers income, liability & asset information the same as they did when the borrower first applied to purchase their home when it only took the lien holder 2-3wks". No more will lien holders need 1yr+ to approve / deny a homeowner request for a loan modification. Making a law to require banks to speed up this process will make it so homeowners KNOW in 2mos or less if they're going to get new, decent loan terms OR if they will need to do a short sale or just move out, move on, work with a credit repair company, go rent & put themselves into a position to be able to purchase again with a lower loan balance & build equity back up from the bottom. Law or no law, I don't buy it that they're not going to still be working on foreclosure paperwork while appearing to be assisting an owner with a modification. The way it's being handled now with the banks stringing along homeowners dangling the proverbial loan mod carrot, while owners are caring for their homes & making Trial Loan mod payments thinking a viable loan mod is just around the corner is NOT the way to go. Because, in the end, the bank has no intention of granting a loan mod that makes any sense for the long term.
met00 July 12, 2012 at 05:31 PM
All the banks got bailed out by the government. All the homeowners didn't. Today the Attorney Generals of most states (CA, NY and some others are NOT participating) are still negotiating a settlement that gives blanket protection to the banks who have committed fraud while providing homeowners no protections at all. It's real nice when the politicians you have bought and paid for stay bought and paid for. Whether it's the banks getting blanket protections from fraud, or the Pharma industry being allowed to see the exact same drug at 400 times the cost between anywhere else in the world an the US [ http://www.americablog.com/2012/07/sen-tom-carper-d-big-pharma-is-why-you.html ], our government is generally for sale against the working class and for the wealthy and the corporations. It's nice to see that in at least this one instance CA again is leading the way in an attempt to level the playing field. @Emily is right. If the bank can get me a loan approval in less than a week for a new purchase, they should be able to do a loan mod in less than a month or two. A better law would have been a clearance center where anyone could apply for a loan mod and any bank could agree to the terms and the bank holding the notes would just have to eat the difference. Let the sharks eat each other rather than feeding off the plight of the working class for a change.
Emily Knell July 12, 2012 at 06:26 PM
Regarding a 'clearance center'; that would never ever happen. The banks will Never ever start doing principal reductions permanently down to current fair market value for the masses of homeowners trying for a loan modification. They would go bust & there would be anarchy in the streets! If the banks were to do this, then everyone who's upside down at all, would just say "Oh, I just have to miss 2-3 mortg pymts, apply for a loan mod & I too will see my loan balance decrease permanently to current fair market value no matter how upside down I am? Even if $300K of my negative debt comes from an equity loan I used to go on a European vacation & bought a yacht with?' Yes, sign me up! No way, will never happen. No 'clearance center', No banks just "eating their losses". No government law is going to force banks to do anything. They've had plenty of time to come up with solutions to offer real help to the masses & it's not working. Only about 2% of homeowners applying for loan mods get one & even then, it's questionable as to whether or not the loan mod given makes sense for the long term. The only real solution is a Short Sale for those with negative equity & a lien holder unwilling to help. And time is running out with the Mortgage Debt Forgiveness Act expiring at the end of this year & I haven't heard a PEEP from either Obama or Romney about extending this & least for another 5yrs. This Act, needs to be extended NOW! Jerry Brown, get this Act extended NOW!


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