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Diane Gallagher

Good news for homeowners regarding mortgages

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Posted: Friday, July 13, 2012 11:14 am

Gov. Jerry Brown signed the California Homeowner Bill of Rights to halt the “abusive tactics” of loan servicers and protect struggling homeowners who are trying, in good faith, to renegotiate their mortgage.

Gov. Brown said, “With this law in place, the foreclosure process would be more transparent so that the loan servicers cannot promise one thing while doing the exact opposite,” Gov. Brown said.

“The California Homeowner Bill of Rights will give struggling homeowners a fighting chance to keep their home,” said Attorney General Kamala Harris. “This legislation will make the mortgage and foreclosure process more fair and transparent, which will benefit homeowners, their community, and the housing market as a whole.”

With these new laws in place, California is the first state in the nation to take provisions in the National Mortgage Settlement, which covered the nation’s five largest mortgage servicers. These rules will apply to all mortgage servicers.

The Homeowner Bill of Rights prohibits a series of inherently unfair bank practices that have needlessly forced thousands of Californians into foreclosure.

The law restricts dual-track foreclosures, where a lender forecloses on a borrower despite being in discussions over a loan modification to save the home.

It also guarantees struggling homeowners a single point of contact at their lender with knowledge of their loan and direct access to decision makers, and imposes civil penalties on fraudulently signed mortgage documents.

In addition, homeowners may require loan servicers to document their right to foreclose.

The laws will go into effect on January 1, 2013. Borrowers can access courts to enforce their rights under this legislation.

Attorney General Kamala Harris secured up to $18 billion for California homeowners in that agreement and has also built a Mortgage Fraud Strike Force to investigate crime and fraud associated with mortgages and foreclosures.

These rules will enhance law enforcement responses to mortgage and foreclosure-related crime, in part by empowering the Attorney General to call a grand jury in response to financial crimes spanning multiple jurisdictions.

Also, to help fight blighted communities related to foreclosure, and help protect tenants in foreclosed homes.

The California Homeowner Bill of Rights, AB 278 and SB 900, was sponsored by Attorney General Harris. AB 278 was authored by Assembly Members Eng, Feuer, Mitchell and John A. Pérez. SB 900 was authored by Senators Leno, Evans, Corbett, DeSaulnier, Pavley and Steinberg.

Have a Great Week! Diane is the President of the Lodi Association of Realtors and can be reached at

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