On Wednesday, a so-called “Homeowner Bill of Rights” moved a step closer to passing, with housing advocates claiming the bill would help people stave off foreclosures. The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) opposes provisions in this measure which will allow anyone to stop the foreclosure process by filing a lawsuit, merited or not.
- C.A.R. agrees that careful and balanced reforms to the foreclosure process are necessary. However, C.A.R. opposes AB 278 because it will further delay the housing recovery by inviting bad-faith lawsuits and defaults, making it difficult for even well-qualified borrowers to obtain financing.
- The legislation would ban the practice of dual-tracking, in which a bank continues foreclosure proceedings while a homeowner is seeking a loan modification; require banks to provide a single of point – either a person or a team – for struggling borrowers; and give borrowers the right to sue their lenders for “significant, material” violations of the new law.
- The bills also require lenders to give a clean explanation when they reject borrowers for a loan modification, to verify mortgage documents before a foreclosure, and to provide copies to borrowers upon request. Lenders can be fined up to $7,500 per loan for filing and recording unverified documents. The bills’ provisions apply to first-lien mortgages for owner-occupants.
- For more information about C.A.R.’s opposition to AB 278 and to learn how to take action, visit this website
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