California Likely to Ratify Foreclosure Prevention Bill
After a somewhat contentious six month battle, California lawmakers put the finishing touches on what they hope will be a fair compromise for the foreclosure-prevention legislation.
The measure is part of a larger Homeowner Bill of Rights package of bills sponsored by state Atty. Gen. Kamala D. Harris aimed at helping borrowers who are behind on mortgage payments avoid foreclosures. A draft of the bill was made public late Friday.
The bill would lock into California law many of the terms of a national foreclosure lawsuit settlement with five big banks.
“The California Homeowner Bill of Rights will help ensure that struggling California borrowers with the means and desire to stay in their homes will have real access to a process that will allow them to do so,” Harris said in a statement.
A two-house legislative conference committee is expected to approve the bill, SB 900, next week and send the package to the floors of both the state Assembly and Senate for final debates and votes.
Passage by the conference committee, which has four majority Democratic and two Republican members, is considered assured now that a key, business-friendly Democrat, Sen. Ron Calderon of Montebello, has signaled his support.
The bill contains a number of provisions that have rankled bankers, mortgage servicers and their allies in the real estate industry.
One such provision would require mortgage loan servicers to give their borrowers a single point of contact instead of bouncing them around from office to office.
A second would limit banks’ ability to begin a foreclosure process if the borrowers have filed documents requesting a loan modification that would lower their monthly payments.
A third provision would give homeowners the ability to sue servicers, under certain restrictions, alleging that they were wrongly foreclosed upon.