This week marked a big legislative win for California homeowners. We’re celebrating it, and we’re here to help consumers understand its implications. Most importantly, the new California Homeowner Bill of Rights increases bank transparency and accountability, recalibrating the locus of control relating to foreclosures.
In the past, Californians who contacted their banks were passed from representative to representative, who all had limited to no prior knowledge of their foreclosure processes. As a result, homeowners who tried to prevent foreclosure through legitimate means were powerlessly led down a rabbit hole, unable to renegotiate mortgages. Additionally, through a practice known as dual tracking, banks had the authority to foreclose on homes even before a loan modification application was reviewed. On the whole, California’s struggling homeowners have had very little control over a very frightening issue. As if the prospect of foreclosure isn’t frightening enough.
The California Homeowner Bill of Rights, signed by Governor Edmund G. Brown Jr. on July 11th, strengthens and protects the role of the homeowner in the foreclosure process. The new laws prohibit dual tracking, require banks to provide more notifications before pursuing foreclosure and establish a main point of contact at the bank for homeowners considering loan modification. The laws also give borrowers the right to file lawsuits and collect damages if lenders commit violations.
Finally no more “abusive tactics” from lenders, said Attorney General Kamala Harris, who supported the bill. Indeed, this is a triumphant moment for California’s homeowners, and we are hopeful that it will help the state’s housing market get back on its feet, giving residents a real opportunity to hold on to their homes – a right that hasn’t been granted in the past.
The new laws will take effect on January 1, 2013. Until then, if you have any questions about how the new homeowner laws affect you, please consider calling McFarlin LLP. We know the foreclosure process can be harrowing, and we’re here to help.