California Lawmakers Move Forward With Homeowner Bill of Rights

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]

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  1. Loias supports harsher punishments against corporations says:

    “Filing unverified documents could result in fines up to $7,500 per incident.”

    I’d prefer to see the fine be a percentage of the appraised value of the home, or $X, which is more (or not appraisal within the last 2 years available).

    • AtlantaCPA says:

      I would hope that filing unverified documents would be a fine as well as nullifying the foreclosure. Can’t tell from the article if that’s the case or not.

    • ARP3 says:

      It would be nicer if they could get prosecuted for fraud or perjury, but this is a start.

  2. IndyJaws says:

    As a previous victim of dual tracking by Wells, I would have welcomed this legislation. Took almost 2 years, but I finally got the HAMP modification, but not without a judge’s stern warning to WF to get their act together.

  3. GaijenSoft says:

    I always like when stuff like this happens, but whenever there is an X bill of rights, they always forget one thing. The responsibility.

    Yes, homeowners should be given certain rights, but they should also have responsibilities, such as letting banks know of any change in circumstances as soon as possible, maintaining property values, and I’m sure you guys can think of some more.

    Yes, we all have rights. But with those rights come responsibility, and we need to let people know of what they are. This works on both sides of the spectrum, both for home owners and for mortgage lenders.

    • Sorta Kinda Lucky Soul says:

      Agreed, but do you really think banks would be more generous and helpful if I called up and told them I’d just lost my job/spouse left me/dog ate all my money and that I couldn’t pay my mortgage for the foreseeable future? You really think they’d immediately start working with me instead of just making a note on the account and sending the nasty letters?

      I’m on board with keeping the property up, not letting the property go downhill (as much as possible), but with stellar examples of caring from Bank of America, Chase and Wells Fargo posted here and in the news where they do everything they can to make people seeking help miserable, I think the consumer needs all the help they can get.

      • GaijenSoft says:

        That’s why I said there are responsibilities both sides need to work on. That does include the banks

    • Loias supports harsher punishments against corporations says:

      Responsibility is a three-way street. Their’s your road, the bank’s road, and then the road the bank paved themselves that bypasses the other two roads entirely.

  4. StarKillerX says:

    Why do I feel that with this being in California one of the rights wont be the right to not be charged confiscatory tax rates?

    • Evil_Otto would rather pay taxes than make someone else rich says:

      You could always move.

      • StarKillerX says:

        I don’t live in California, when I said “this being…” I meant it as “this being done in…”

        But I find it ironic that the left has adopted what they’ve long decried, and that is the “if you don’t like it leave” mentality.

        That isn’t direct at you specifically, or even anyone on this site in general, but more and more often I see those supporting tax and spend policies saying things like “if you don’t like X move to a different country” where X is anything like new taxes, increased government spending, etc….

    • Kate Blue says:

      I live in California and I don’t have a problem with the tax rates. I do like living where I have a lot more rights than they do in other states. And I like living where everything is happening and new business starts here first.

      It’s been that way for as long as conservatives have been whining about how the tax rate is going to drive all the businesses away. Funny, it sure looks like they are still here and still being on the cutting edge.

  5. Blueskylaw says:

    “Filing unverified documents could result in fines up to $7,500 per incident”

    So who would get the $7,500 dollars again – the victim or the State of Kali-fornicate?

  6. Lokisince89 says:

    Technically doesn’t the bank own the home while it’s under mortgage? So wouldn’t a Homeowners Bill of Rights help the bank?

    • crispyduck13 says:

      Someone correct me if I’m wrong, but the deed holder depends on the state. In PA the person who signed on to pay the mortgage has their name on and is in possession of the deed. Which is wierd becuase with a car loan the bank does physically hold the title, and then when you pay it off they mail it to you and their business name is taken off in the DMV system.

    • ARP3 says:

      Generally no. In most states, the person owns the home and the bank has a loan with that person where the loan is”backed” with a property interest.

  7. SoCalGNX says:

    Way too little and way too late.

  8. Robert Nagel says:

    This should make banks a lot more willing to lend to marginal customers for homes. this should also make it a lot easier to sell your home to one of the lucky ones that was able to get a loan. The only buyers will be those with sterling credit as those are the only ones the banks will be able to lend to.

    • frodolives35 says:

      Because some homeowners had NO responsibility in the housing crisis right. There is blame all around. I don’t want to pay the cost of irresponsible purchasers any more then for crooked loan packaging deals. Remember we are talking about the front end of the loan process not the back end that this law is really intended for. This is just really damage control for the poor bastards that are trying to do the right thing with the circumstance they may have not helped to create.

  9. DragonThermo says:

    How does the Homeowner Bill of “Rights” protect lenders from predatory borrowers? By continuing to file for a loan modification, knowing it will be denied, people can live in a home for free forever. Meanwhile the bank can’t foreclose and sell the property.

    I do agree, however, that robosigning should be illegal and the borrower having a single point of contact is a good thing.

  10. dks64 says:

    My parents played this game for 2 years. It’s bull crap, stressful, and a waste of time.