April 12, 2012
Homeowners From Foreclosure Abuses
Lawmakers on two key committees in the California state legislature will vote on a number of bills next week that aim to protect homeowners from mortgage foreclosure abuses. Consumers Union, the policy and advocacy arm of Consumer Reports, urged state lawmakers today to support the “California Homeowner Bill of Rights” when the package of proposals comes up for a vote beginning on Monday, April 16.
“Californians are still vulnerable to abusive mortgage foreclosure practices that have contributed to a record number of homeowners losing their homes,” said Norma Garcia, Senior Attorney for Consumers Union. “These bills will help ensure that Californians struggling to pay their mortgage will be treated fairly and stand a better chance of avoiding foreclosure.”
The California Homeowner Bill of Rights is sponsored by Attorney General Kamala Harris. Among the bills Consumers Union is urging lawmakers to support are:
The Foreclosure Reduction Act of 2012 (AB 1602 / SB 1470): These companion bills would provide all Californians with the same protections against fraudulent mortgage practices that were won as part of a nationwide settlement earlier this year involving five major banks. The settlement was negotiated by the U.S. Department of Justice and Attorneys General from 49 states, including California’s Kamala Harris.
In particular, the bill would prohibit lenders from foreclosing on a mortgage if the homeowner has a pending application for a loan modification and establishes additional safeguards for homeowners before a notice of default could be recorded. The legislation adds more transparency to the foreclosure process and requires the lender to demonstrate that it has a right to foreclose on the property.
AB 1602 will be considered by the Assembly Banking and Finance committee on Monday, April 16. The Senate Banking Committee will take up SB 1470 on Wednesday, April 18.
Due Process Reform Legislation (AB 2425 / SB 1471): These companion bills would provide additional protections to California homeowners facing foreclosure to ensure they are treated fairly. These protections include enhanced penalties for lenders that falsify information; a private right of action to challenge unlawful foreclosure proceedings; and a requirement that banks provide homeowners going through the foreclosure process with a single point of contact.
The Assembly Banking and Finance Committee will vote on AB 1470 on Monday, April 16. SB 1471 will be considered by the Senate Banking Committee on Wednesday, April 18.
Michael McCauley, mmccauley@consumer.org, 415-431-6747, ext 126