Attorney General Kamala D. Harris announced that the California legislature passed the California Homeowner Bill of Rights, which provides consumer protections for homeowners and reforms to the mortgage and foreclosure process. If signed into law by the Governor of California, the new legislation would become effective on January 1, 2013 and would apply to banks and other lenders. The new legislation codifies many of the core protections from the nationwide settlement with five of the largest U.S. banks. Key elements of the legislation are (1) restricting dual-track foreclosures, where lenders pursue foreclosure proceedings on a homeowner while also engaging in loan modification discussions with the homeowner; (2) requiring lenders to provide homeowners with a single point of contact at the lender who has knowledge of the homeowners loan and direct access to decision makers; (3) imposing civil penalties on robo-signing, where lenders repeatedly file foreclosure documents without verifying their accuracy; and (4) permitting homeowners to require lenders to document their right to foreclose.
Alert July 10, 2012