FORECLOSURE DELAYED UNTIL THE “BANKS” GIVE RIGHTS TO HOMEONWERS

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Under the New California Homeowners Bill of Rights the State of California has found that it is essential to mitigate the negative effects on the economy and the housing by modifying the foreclosure process to ensure that borrowers who may qualify for a foreclosure alternative are considered for, and have a meaningful opportunity to obtain, available loss mitigation options. And that avoiding foreclosure, where possible, will help stabilize the state’s housing market and avoid the substantial, corresponding negative effects of foreclosures on families, communities, and the state and local economy.

The California Homeowners Bill of Rights prohibits notice of default (the first step in a foreclosure ) until 30 days after the mortgage servicer has:

Sent a first-class letter to the homeowner that includes the toll-free telephone number made available by HUD to find a HUD-certified housing counseling agency.

Attempt to contact the borrower by telephone at least three times at different hours and on different days.

Sent a certified letter, within two weeks after the telephone call requirements

Provided a means for the borrower to contact it in a timely manner, including a toll-free telephone number that will provide access to a live representative during business hours.

Posted a prominent link on the homepage of its Internet Web site containing the

following information:

Options that may be available to borrowers who are unable to afford their mortgage payments and who wish to avoid foreclosure, and

instructions to borrowers advising them on steps to take to explore those options,

A list of financial documents borrowers should collect and be prepared to present to the mortgage servicer when discussing options for avoiding foreclosure,

A toll-free telephone number for borrowers who wish to discuss options for avoiding foreclosure with their mortgage servicer, and

The toll-free telephone number made available by HUD to find a HUD-certified housing counseling agency.

This means the “bank” must give the homeowner a single point of contact with a live person, notice of the options to refi, and a list of documents needed to apply for a refi.

The new Bill of Rights also gives the homeowner the right to designate a lawyer or other representative to help in the loan modification and the foreclosure prevention process. My estimate is that this process will extend the time for a foreclosure to 9- 12 months from the date the “bank” decides to start the foreclosure process and give a fair opportunity for borrowers to refi or otherwise avoid foreclosure.

By David DiJulio:

For more informantion contact : DiJulioLawGroup.com

SUMMARY OF THE HOMEOWNERS BILL OF RIGHTS

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Under the New California Homeowners Bill of Rights, the State of California has found that it is essential to modify the foreclosure process to ensure that borrowers have a meaningful opportunity to obtain available loss mitigation options.

The California Homeowners Bill of Rights which goes into effect January 1, 2013, has five major components:

  • Prohibiting “dual track” foreclosures that occur when a Bank continues foreclosure while also reviewing a homeowner’s application for a loan modification.
  • Creating a single point of contact for homeowners who are negotiating a loan modification.
  • Expanding notice requirements that must be provided to a borrower before taking action on a loan modification application or pursuing foreclosure; and
  • Allowing injunctions to stop all activiity until violations are corrected
  • Permitting civil penalties against Banks that file multiple, inaccurate mortgage documents or commit reckless or willful violations of law.

By prohibiting dual-tracking (refi and sale at the same time) this legislation provides borrowers with certainty that their loan application will receive full review and consideration before any foreclosure occurs. These requirements also provide the borrower with a legal remedy to challenge the actions of Banks that engage in dual-track or other material violations of law.

The Homeowner Bill of Rights also requires a single point of contact for borrowers seeking loan modification. This requirement will make loan Banks more accountable and prevent them from repeatedly transferring applications and phone calls to various departments and employees.

Under the new law, Banks must notify borrowers when a modification application is due, if foreclosure has been postponed and if a modification has been denied. Each of these new rules increases transparency and helps to ensure that borrowers are properly informed of the actions taken by a Bank before foreclosure activities begin.

Borrowers have a right to file private lawsuits under this new law to block foreclosure until the lender corrects any material violation. Borrowers can also receive treble damages up to $50,000 if Banks act intentionally or recklessly in violating the law. These provisions protect the rights of consumers, while allowing Banks to correct unintentional violations.

The new Bill of Rights also gives the homeowner the right to designate a lawyer or other representative to help in the loan modification and the foreclosure prevention process. Finally, the court can award a prevailing borrower reasonable attorney’s fees and costs in an action brought pursuant to this section

By David DiJulio:

For more information contact:

CALIFORNIA HOMEOWNER BILL OF RIGHTS

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On July 11, 2012, Governor Jerry Brown signed the California Homeowner Bill of Rights into law to bring fairness, accountability and transparency to the state’s mortgage and foreclosure process.

More than one million California homes were lost to foreclosure between 2008 and 2011-with an additional 700,000 currently in the foreclosure pipeline.
Seven of the nation’s 10 hardest-hit cities by foreclosure rate in 2011 were in California.

The California Homeowner Bill of Rights marks the third step in Attorney General Harris’ response to the state’s foreclosure and mortgage crisis.
The first step was to create the Mortgage Fraud Strike Force, which has been investigating and prosecuting misconduct at all stages of the mortgage process. The second step was to extract a commitment from the nation’s five largest banks of an estimated $18 billion for California borrowers. The settlement contained thoughtful reforms but are only applicable for three years, and only to loans serviced by the settling banks.

Two key bills of the Homeowner Bill of Rights contain significant mortgage and foreclosure reforms. The major provisions of

AB 278 (Eng/Feuer/Mitchell) and SB 900 (Leno/Corbett/DeSaulnier/Evans) include:

Dual track foreclosure ban:Single point of contact:Enforceability:Verification of documents:
The recording and filing of multiple unverified documents will be subject to a civil penalty of up to $7,500 per loan in an action brought by a civil prosecutor. Enforcement will also be allowed under a violator’s licensing statute by the Department of Corporations, Department of Real Estate or Department of Financial Institution. Borrowers will have authority to seek redress of “material” violations of theCalifornia Homeowner Bill of Rights. Injunctive relief willbe available prior to a foreclosure sale and recovery of damages will be available following a sale. Mortgage servicers will be required to designate a “single point of contact” for borrowers who are potentially eligible for a federal or proprietary loan modification application. The single point of contact is an individual or team with knowledge of the borrower’s status and foreclosure prevention alternatives, access to decision makers, and the responsibility to coordinate the flow of documentation between borrower and mortgage servicer. Mortgage servicers will be required to render a decision on a loan modification application before advancing the foreclosure process by filing a notice of default or notice of sale, or by conducting a trustee’s sale. The foreclosure process is essentially paused upon the completion of a loan modification application for the duration of the lender’s review of that application.

The Homeowner Bill of Rights goes into effect on January 1, 2013.

For more information contact: DiJulioLawGroup.com

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