Governor Brown recently signed into law the California Homeowner Bill of Rights, which was designed to put a stop to the abusive tactics of banks and servicers and protect homeowners who are trying, in good faith, to renegotiate their mortgages. There have been too many stories of homeowners who thought they were progressing through the modification process when their home gets foreclosed on anyway. There are four main components to the legislation:
- Prohibits “dual-track” foreclosures that occur when a servicer continues foreclosure while also reviewing a homeowner’s application for a loan modification.
- Creates a single point of contact for homeowners who are negotiating a loan modification.
- Expands the notice requirements that are to be provided to a borrower before taking action on either a loan modification or a foreclosure.
- Allows injunctions against foreclosure until violations are corrected and permits civil penalties against servicers that file multiple, inaccurate mortgage documents or commit reckless or willful violations of the law.
Some might be worried that this is encouraging litigation and may further discourage lending, but come on, isn’t it time the homeowner got a break? If you’ve been on the wrong end of a modification attempt or foreclosure, you know just what I’m talking about…