Could Bill of Rights Protect California Homeowners from Wrongful Foreclosure Practices?California was one of the states hit hardest by the real estate crisis and homeowners throughout the state continue to personally deal with high foreclosure rates and faltering property values. To help make sure homeowners are treated fairly during foreclosure and in an effort to protect them from the injurious consequences of wrongful foreclosures, California Attorney General Kamala Harris has announced a California Homeowner Bill of Rights, explains a lawyer in the state.
The California Homeowner Bill of Rights
The legislation that make up the California Homeowner Bill of Rights include:
- Assembly Bill 1602/Senate Bill 1470 (The Foreclosure Reduction Act of 2012). This Act mandates that creditors provide borrowers with documentation establishing the right to foreclose before a notice of default is recorded. Creditors are also required to prove ownership and their right to foreclose, and to provide documents demonstrating the chain of title on the property at the time when they file the notice of default. When applications for loan modification are pending or when the buyer is current on a modified repayment program, the bill also prevents creditors from recording a notice of default or a notice of sale.
- Assembly Bill 2425/Senate Bill 1571 (Due Process Reform Legislation). This Bill would require creditors to provide borrowers with a single contact point during the foreclosure process. The Bill also imposes a $10,000 civil penalty when "robosigned" documents are filed (these are foreclosure documents that are simply signed without confirming the accuracy of the information contained within them).
- Assembly Bill 2314/ Senate Bill 1472 (Blight Prevention Legislation). This Act imposes greater fines on owners of blighted property, but prevents blight enforcement actions within 60 days of the new purchase of a blighted property, as long as that property is under repair.
- Assembly Bill 2610 / Senate Bill 1473 (Tenant Protection Legislation). This Bill mandates that anyone who purchases a foreclosed home must give tenants of the home at least 90 days notice before starting the eviction process.
- Assembly Bill 1950: This Bill, which reports indicate mortgage lenders will strongly oppose, imposes a $25 fee on any loan servicer who is recording a notice of default. Proceeds earned from the fees would be put into a fund used to support the efforts of the Attorney General to fight mortgage fraud.
- Senate Bill 1474/ Assembly Bill 1763: This last Bill allows the attorney general to convene a special grand jury for cases involving financial crimes against the state that span multiple jurisdictions.
Given the extent to which banks contributed to the foreclosure crisis in the state—both in their initial issuance of subprime loans and sale of them as bonds and their engagement in egregious foreclosure practices like robosigning—more protections are clearly needed for homeowners, explained a lawyer. Hopefully this legislation will ensure that Californians are no longer personally subjected to the injurious consequences of wrongful foreclosure practices.
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