California is one of the many states hit in the gut by the collapse of the housing market, with at least a million homes already lost to foreclosure and about half as many struggling homeowners simultaneously trying to stave off foreclosure while jumping through hoop after hoop in the hopes of getting a mortgage modification. Yesterday, pending legislation that could help these homeowners came one step closer to being a reality.
The biggest chunks of the Homeowner Bill of Rights — proposed earlier this year by California Attorney General Kamala Harris — has survived a bipartisan conference committee and could go before the full state Senate and Assembly next week.
From the San Francisco Chronicle:
The legislation would ban the practice of dual-tracking, in which a bank continues foreclosure proceedings while a homeowner is seeking a loan modification; require banks to provide a single point of contact – either a person or a team – for struggling borrowers; and give borrowers the right to sue their lenders for “significant, material” violations of the new law.
Lenders who reject a modification would also be required to provide a clear explanation for the denial. And if the process gets to the foreclosure stage, the lender would need to verify all related documents — and provide the homeowners with copies if requested.
Filing unverified documents could result in fines up to $7,500 per incident.
The Chronicle reports that this bill is more likely to pass than previous efforts, which had been stymied by Republicans and some moderate Democrats in Sacramento. Some of those moderates have already gotten behind this legislation, and Governor Jerry Brown has shown no indication he would veto the bill.
The Bill of Rights does face opposition from big banks, the California Chamber of Commerce, title companies, trustees and securities industry representatives.
Homeowner Bill of Rights plans move forward [SFgate.com]