California, which has been called the "epicenter" of the foreclosure and mortgage crisis by Attorney General Kamala Harris, was one of the hardest states hit by the economic meltdown and real estate crash brought on by the latest financial crisis. According to a recent report, in 2011, seven of the nation's 10 hardest-hit cities by foreclosure were in California.
California's prolonged real estate slump has resulted in more than one million California homes were lost to foreclosure in the past three years alone. To bring this point home, I am talking not about homes simply in foreclosure or threatened by foreclosure, but lost through foreclosure.
Moreover, while parts of the California real estate market are recovering, statewide there are an additional 700,000 properties currently in various stages of the foreclosure process.
As a result of the fact that California was one of the hardest states hit by the latest financial crisis, in order to stem the wave of foreclosure, this past summer the California legislature enacted into law a "Homeowner Bill of Rights" for the purpose of aiding embattled homeowners and bring fairness, accountability and transparency to the state's foreclosure process.
Some of its key provisions include the ban on "dual tracking," a practice whereby the lender on one hand gives the illusion of working with the borrower to secure a modification and at the same time, is foreclosing. Needless to say, many homeowners are lulled into a false sense of security by such practice, thinking they will get a modification, when in reality the bank wants to do nothing more than foreclose and take the home.
The dual tracking ban set forth in the statute would prohibit a mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent from recording a notice of default or recording a notice of sale or conducting a trustee's sale while a complete loan modification application is pending on a first lien mortgage or deed of trust secured by residential real property not exceeding 4 dwelling units that is owner-occupied.
Another provision that is designed to cut down on the abuses rampant in the modification business is that under the new law mortgage servicers will be required to designate a "single point of contact" for borrowers potentially eligible for a loan modification. The single point of contact will not only be responsible to coordinate the flow of documentation but will also be required to be knowledgeable about the borrower's status and foreclosure prevention alternatives. How this latter provision will play out in the court's is anybody's guess.
The new law also establishes procedures to be followed in connection with a modification application on a loan secured by a first lien. There are also procedures that must be followed in connection with the denial of an application, and most importantly it provides for a borrower's right to appeal a denial.
If all else fails, a California homeowner will be able to seek legal redress for violation of the Homeowner's Bill of Rights. Enforcement provisions permit a borrower, who is forced to litigate with his/her lender, to seek an injunction staying foreclosure.
Besides injunctive relief, the new law authorizes the greater of treble actual damages or $50,000 in statutory damages if a violation of certain provisions of the law is found to be intentional, reckless or resulting from willful misconduct.
There are other changes, as well. For example, formerly, a Trustee's Sale could be continued month - to - month for up to a year, without written notice to the borrower of the continued date. Under the new law, however, once foreclosure begins if a Trustee's Sale date is postponed, the law requires written notice be given to the borrower.
The Homeowners Bill of Rights can be found in the recent amendments and additions to the California Civil Code Sections relating to mortgages.
California's prolonged real estate slump has resulted in more than one million California homes were lost to foreclosure in the past three years alone. To bring this point home, I am talking not about homes simply in foreclosure or threatened by foreclosure, but lost through foreclosure.
Moreover, while parts of the California real estate market are recovering, statewide there are an additional 700,000 properties currently in various stages of the foreclosure process.
As a result of the fact that California was one of the hardest states hit by the latest financial crisis, in order to stem the wave of foreclosure, this past summer the California legislature enacted into law a "Homeowner Bill of Rights" for the purpose of aiding embattled homeowners and bring fairness, accountability and transparency to the state's foreclosure process.
Some of its key provisions include the ban on "dual tracking," a practice whereby the lender on one hand gives the illusion of working with the borrower to secure a modification and at the same time, is foreclosing. Needless to say, many homeowners are lulled into a false sense of security by such practice, thinking they will get a modification, when in reality the bank wants to do nothing more than foreclose and take the home.
The dual tracking ban set forth in the statute would prohibit a mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent from recording a notice of default or recording a notice of sale or conducting a trustee's sale while a complete loan modification application is pending on a first lien mortgage or deed of trust secured by residential real property not exceeding 4 dwelling units that is owner-occupied.
Another provision that is designed to cut down on the abuses rampant in the modification business is that under the new law mortgage servicers will be required to designate a "single point of contact" for borrowers potentially eligible for a loan modification. The single point of contact will not only be responsible to coordinate the flow of documentation but will also be required to be knowledgeable about the borrower's status and foreclosure prevention alternatives. How this latter provision will play out in the court's is anybody's guess.
The new law also establishes procedures to be followed in connection with a modification application on a loan secured by a first lien. There are also procedures that must be followed in connection with the denial of an application, and most importantly it provides for a borrower's right to appeal a denial.
If all else fails, a California homeowner will be able to seek legal redress for violation of the Homeowner's Bill of Rights. Enforcement provisions permit a borrower, who is forced to litigate with his/her lender, to seek an injunction staying foreclosure.
Besides injunctive relief, the new law authorizes the greater of treble actual damages or $50,000 in statutory damages if a violation of certain provisions of the law is found to be intentional, reckless or resulting from willful misconduct.
There are other changes, as well. For example, formerly, a Trustee's Sale could be continued month - to - month for up to a year, without written notice to the borrower of the continued date. Under the new law, however, once foreclosure begins if a Trustee's Sale date is postponed, the law requires written notice be given to the borrower.
The Homeowners Bill of Rights can be found in the recent amendments and additions to the California Civil Code Sections relating to mortgages.
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