The State of California’s Effort to Protect Homeowners
Here in the Golden State, our government has passed the Homeowner Bill of Rights. While similar provisions were established in the Attorney Generals’ settlement with the top five banks, the HBoR (as it is abbreviated) applies to all lenders in California that foreclose on more than 175 homes a year. Attorneys in the state are already suing banks under these provisions and is already costing the banks more than they’d like. Here in Northern California, the National Housing Law Project is providing educational seminars for attorneys to pursue the banks in court. The Homeowner Bill of Rights went into effect on January 1, 2013 and will sunset five years later
So what does the HBoR do for you?
- Eliminates Dual Tracking – Many banks were accepting loan modification, short sale, and refinancing paperwork without halting the foreclosure process for that property. A classic case of the right hand not knowing what the left is doing, some speculate that the banks were purposefully ignoring homeowners’ attempts to save their homes out of spite or greed. Now lenders operating in California must approve or deny the foreclosure prevention alternative
- Provide a Single Point of Contact – Until this provision was enacted, many mortgage servicers and banks did not have a single person or team to handle a property regarding foreclosure for properties. Numerous homeowners were forced to repeat their situation to new agents responsible for their cases every time they called. Now an individual agent or a team assigned to a property must handle direct communications with the homeowner. The agent or team must have knowledge of the homeowner’s current status, information regarding foreclosure and alternatives, access to decision makers, and be responsible for all documents pertaining to the homeowner.
- Halts Robo-Signing Fiasco – In the past few years banks have been overwhelmed, under-staffed, and unprepared for the number of foreclosures caused by the credit crisis. Robo-signing is the practice of a mortgagor’s employee “reviewing” documents with a 30 second glance and submitting an affidavit to continue with foreclosure. This practice resulted in wrongful foreclosures and unnecessary headache for everyone involved. The California Homeowner Bill of Rights protects residents of the state by enacting $7,500 penalty per loan that does not have the proper documents filed, recorded, or verified.
- Homeowners Are Empowered to Sue – Previously, any homeowner who wanted to sue their lender was outgunned all the way around. Banks are notorious for having not only the monetary resources to dwarf any single homeowner’s efforts but also a crack legal team. Now things are skewed to balance the playing field and banks are not happy.
We are continually educating ourselves here at Upside Down CA. The California Homeowner Bill of Rights is just another aspect for our devoted team to become experts on. We are working with the NHLP and are constantly striving to improve our skill set. Call 916.442.6400 if you feel you were wrongfully foreclosed.