Browse releases

By date

September 2016
August 2016
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
February 2007
January 2007
December 2006

Media Resources

Print

Release Date: 12/19/2012

Californians Get New Protections against Foreclosure Abuses on January 1

California Law Could Serve As Model for Other States
 
California homeowners struggling to avoid foreclosure will enjoy new state protections against lender abuses starting on January 1.  That’s when the Homeowners Bill of Rights passed by state lawmakers earlier this year will go into effect. 
 
“Too many Californians have lost their homes despite doing all they can to avoid foreclosure,” said Norma Garcia, senior attorney and manager of the financial services program of Consumers Union, the policy and advocacy arm of Consumer Reports.  “California’s new law will help more homeowners avoid foreclosure and keep their homes.  Ultimately, that will help stabilize the California’s housing market and benefit California families, communities, and our economy.”
 
For tips for California homeowners, see Consumers Union’s “What Borrowers Need to Know” factsheet.

California has been particularly hard hit by the foreclosure crisis. Over 900,000 foreclosures occurred in California between 2007 and 2011. Last year, 38 of the top 100 ZIP codes hit hardest by foreclosures were in California. California’s foreclosure crisis has hurt property values throughout the state and resulted in less revenue for schools, public safety, and other vital public services.

The Homeowners Bill of Rights includes a number of important protections for Californians, including:

Curbs Dual Tracking: Many homeowners lose their homes to foreclosure while they are trying to negotiate a loan modification. The law extends a provision of the National Mortgage Settlement to ensure that borrowers who submit a complete loan modification application will get an answer from the lender with an explanation for the decision before the foreclosure process can commence or be continued.  Lenders must notify borrowers who do not submit an application before a Notice of Default is issued that they still have the right to apply for a loan modification. For those already in foreclosure, loan servicers must also provide additional notifications, with some exceptions.  The servicer is prohibited from recording a Notice of Sale on the property until the borrower is provided with a decision on the loan modification application when one is filed by the borrower.

Requires Lenders to Provide Proper Documentation:  Under the new law, a loan servicer must review reliable evidence to prove that the borrower has defaulted on the mortgage and that it has the right to foreclose on the property.  This provision of the law is designed to prevent lenders from robo-signing foreclosure notices without proper documentation.

Provides Borrowers with a Single Point of Contact: Borrowers who may qualify for a loan modification must be provided with a single point of contact at the lender.  The contact person must provide clear and accurate information to the borrower and help coordinate the loan modification process.

Holds Lenders Accountable:  Borrowers may bring legal action against loan servicers for material violations of the law after a notice of default has been recorded.  Servicers will be given the opportunity to address any violations of the law prior to a foreclosure sale.  Judges may provide injunctive relief that requires the servicer to stop the foreclosure sale and correct any violations of the law and may award damages and attorneys fees for legal actions brought after a foreclosure sale.

The Homeowner Bill of Rights codifies many of the key protections negotiated by the U.S. Attorney General and 49 state Attorneys General earlier this year as part of the National Mortgage Settlement.  This is significant because the National Mortgage Settlement is due to expire in 2015.    
 
The California law also applies to all homeowners, not just those covered by the National Mortgage Settlement.  And the state law applies to all lenders, not just the five major banks who agreed to the national settlement.
 
“California’s new law should serve as a model for the rest of the country,” said Garcia.  “Homeowners in all 50 states deserve these same strong protections and more.”

Contacts:
Norma Garcia, Consumers Union, 415.431.6747 ext 122 or ngarcia@consumer.org
Michael McCauley, Consumers Union, 415.431.6747 ext 126 or mmccauley@consumer.org

See press release archive

RSS News Feed

Get all the latest information from the CR Press Room delivered right to your desktop.