A new law passed earlier this month in California could become a model for foreclosure relief around the country. On July 2, lawmakers approved legislation to strengthen the rights of homeowners facing foreclosure.
If Governor Jerry Brown signs the bill it will be the first in the nation to put into state law several significant provisions that are contained in the national foreclosure settlement with five large banks.
“I think we all should feel very good that we have done something that was just the right thing to do,” state Attorney General Kamala Harris said at a press conference following the vote.
The bill targets so-called “dual tracking” by stopping lenders from beginning the home foreclosure process while a loan modification is being negotiated. It also seeks to curb the use of “robo-signed”, unverified documents that can speed up the foreclosure process.
The legislation also provides homeowners with some legal recourse, such as the ability to seek an injunction blocking the sale of their foreclosed home, and requires that large financial institutions give borrowers negotiating a loan modification a single point of contact for dealing with their home financing issue. Many homeowners have complained that numerous and ever changing contact persons makes the process more difficult.
Institutions that foreclosed on fewer than 175 homes the previous year would be exempt from some parts of the law.
The provisions in the bill that were part of the national settlement, which already apply to the five banks involved in that agreement, would take effect for other institutions Jan. 1, 2013, with some provisions sunsetting after five years.
The five mortgage servicers that are parties to the settlement are Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and Ally Financial.
In Missouri and Kansas, Fletcher, Rohrbaugh and Chahine can be your ally if you’re facing foreclosure. Our attorneys will work with you to explore all of your options whether it’s a loan modification, short sale or other solutions. We’ll also make sure you are protected from predatory lending, unfair mortgage terms, or overly high-rate loans. Fletcher, Rohrbaugh and Chahine will stand with your to ensure that you’re treated fairly and with dignity.