Hey, rest of the country that isn’t California! This is how you do it: California legislators went ahead and approved a sweeping bill on Monday that is basically a homeowner bill of rights, including ending abusive practices by mortgage lenders while at the same time helping homeowners evade the abyss of foreclosure. California ain’t kidding around.

While there are other states with similar legislation, this is among the most ambitious of its type in the nation, notes Reuters. It would prevent banks from “dual-tracking” — moving forward on foreclosures during the process of negotiating with homeowners over loan modifications.

As we reported before, 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 law would also provide for lawsuits against robo-signing, which is when foreclosure documents are signed in a big bunch without any sort of review. Big banks were already smacked with a $25 billion settlement over that practice as well as others as the result of a multi-state foreclosure lawsuit.

Governor Jerry Brown is expected to sign the legislation in the coming days.

California has been hurting especially hard from the housing meltdown, which makes this legislation quite a bright spot for the state: Last week the city of Stockton became largest U.S. city ever to file for bankruptcy, partly due to the nation’s housing collapse.

Previously: California Lawmakers Move Forward With Homeowner Bill of Rights

California lawmakers approve foreclosure-protection law [Reuters]

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