California Foreclosure Reg Set to PASS

hibiscus

LoanSafe Member
Sep 19, 2011
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California
The California Foreclosure Act would help protect homeowners in a number of important ways, including provisions that:

Curbing Dual Tracking: Many homeowners lose their homes to foreclosure while they are trying to negotiate a loan modification. The bill would extend a provision of the national mortgage settlement to ensure that borrowers who submit a complete loan modification application will get an answer from the lender with an explanation for the decision before the foreclosure process can be started. Lenders must notify borrowers who do not submit an application before a Notice of Default is issued that they still have the right to apply for a loan modification. The servicer is prohibited from recording a Notice of Sale on the property until the borrower is provided with a decision on the loan modification application.

Requiring Lenders to Provide Proper Documentation: Under the bill, a loan servicer must be able to produce reliable evidence to prove that the borrower has defaulted on the mortgage and that it has the right to foreclose. This provision is designed to prevent lenders from robo-signing foreclosure notices without proper documentation.

Read the entire article here Foreclosure Reduction Act Approved By Key California Assembly & Senate Leaders

The WSJ reported that States across the country are proposing a range of new rules that would make it more difficult for banks to foreclose on troubled homeowners.
 

isisis

LoanSafe Member
Jun 22, 2010
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Thanks for posting this, Hibiscus.

Sounds like good news. I don't suppose it's retroactive is it, i.e. applicable to foreclosure actions already taken or in progress?
 

razmik

LoanSafe Member
May 6, 2012
238
8
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California
[h=1]So the California homeowner protection plan bill is passed today, what do you folks think about it. You think it will help us to go through the fight better

California homeowner protection plan goes to vote[/h]Monday, July 02, 2012






Christina Salvo
More: Bio, Recent Stories, News Team



LOS ANGELES (KABC) -- California homeowners facing foreclosure could soon have some added protection if state lawmakers approve a so-called Homeowners Bill of Rights. A vote was expected Monday.
The protections would extend further than the $25 billion national mortgage settlement that was reached earlier this year with the nation's top five banks, which include Bank of America, Wellsfargo, JP Morgan Chase, CitiGroup and Allied Financial.
If California does write the homeowner's protection plan into law, it would:


  • Prohibit lenders from foreclosing while considering alternatives to the foreclosure process.
  • Allow California homeowners to sue lenders to stop foreclosures or seek monetary damages if the lender violates state law.
  • Require large lenders to provide a single point of contact for homeowners who want to discuss loan modifications.

If approved, the protections would not only become permanent, but California would be the first state to write them into law. This means the protections would apply to all Californians, not just those with mortgages with the five banks involved in the national settlement.
Federal and state authorities reached the nationwide settlement in February to help nearly 2 million home owners threatened by foreclosure. That deal holds mortgage services accountable for abusive practices and requires them to commit financial relief for consumers. During the financial crisis, many companies processed foreclosures without verifying documents.
In California, much of the money from the nationwide settlement will go to the most distressed homeowners. The state's share of the settlement is $18 billion, and that includes $12 billion in principal reductions for homeowners.
However, the nationwide agreement will expire after five years, so California's agreement would ensure that all homeowners in the state would be permanently protected.
Majority democrats do believe they have the votes to send the protections package to the governor's desk, despite opposition from businesses and lending companies. They fear the bill will allow homeowners to bring forth an onslaught of frivolous lawsuits by people who should not have loans in the first place.

(Copyright ©2012 KABC-TV/DT. All Rights Reserved.)
 

Jeffrey L. Shurtliff

LoanSafe Member
Dec 4, 2010
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Good share Hibiscus. In my state they voted on reform, on this dual tracking. The law specifically states here that the borrower must be offered a work out plan before foreclosure.
 

isisis

LoanSafe Member
Jun 22, 2010
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North bay
This was forwarded to me from a contact. It's one attorney's take on the changes.

"Good provisions:

Sec. 2923.55 (a) and (b)(1)(B)(i) requires sending the borrower a copy of the note if requested.

Great provisions:

Sec. 2924 (a) (5) and (6)—(5) requires written notice of new sale date is foreclosure is postponed by at least 10 days.
2924(a)(6) precludes recording of notice of default or otherwise initiating foreclosure process by any entity who is not the holder of the beneficial interest under the mortgage or trust deed, the original trustee, the original trustee or substituted trustee under the DOT. No notice of default or initiation of foreclosure can be done by any agent of the holder of the beneficial interest, the original or substituted trustee, except “when acting within the scope of authority designated by the holder of the beneficial interest.â€

Sec. 2924.12(a) authorizes an action for injunctive relief to enjoin a material violation of secs. 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 2924.11, or 2924.17. (sec. 2924.19 authorizes a borrower to seek an injunction for violations of secs. 2923.5, 2924.17, or 2924.18.)

Sec. 2924.12(b) authorizes an action for damages following recordation of a trustee’s deed upon sale. The borrower can recover actual economic damages under CC 3281 for material violation of the above sections unless the violation is corrected and remedied prior to recordation. Court may award the borrower the greater of treble actual damages or $50,000 if it finds the material violation was intentional, reckless, or resulted by willful misconduct. These remedies “are in addition to and independent of any other rights, remedies, or procedures under any other law. Nothing in this section shall be construed to alter, limit, or negate any other rights, remedies provided by law.†2924.12(h). Reasonable attorney’s fees and costs may be awarded to a prevailing borrower by the court. 2924.12(i). However, no claim lies against a signatory to the consent decree in U.S. v. Bank of America, Dist. Of D.C., case no. 1:12-cv-00361RMC if that signatory is in compliance with the relevant terms of the Settlement Term Sheet with respect to the particular borrower. 2924.12(g).

Sec. 2924.17 requires declarations of compliance under sec. 2923.5 or 2923.55 (until 1-1-18), or notices of default, notices of sale, assignments of DIT’s, or substitutions of trustee, to be accurate and complete and supported by competent and reliable evidence. Government entities may obtain civil penalties per mortgage or DOT from any servicer that engages in multiple and repeated uncorrected violations in recording documents or filing them in any court.

I had understood previously that this law will take effect next January, but after reading it, I’m not sure it won’t be effective upon the governor’s signature. It wasn’t adopted as an urgency measure—does anyone know if that means we wait until Januaryâ€


 

KimberlyS

LoanSafe Member
Jun 30, 2012
451
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isisis- thanks for forwarding the comments on this!

I'm interested to hear the answer to this:

I had understood previously that this law will take effect next January, but after reading it, I’m not sure it won’t be effective upon the governor’s signature. It wasn’t adopted as an urgency measure—does anyone know if that means we wait until January?