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.
Today, while there are certainly parts of the California where the real estate market is 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.
Key provisions of California's recent legislation include a ban on the practice of "dual tracking." For those unfamiliar with this term, "dual tracking" is the practice whereby the lender gives the illusion of working with the borrower to secure a modification, while at the same time foreclosing. Such a practice provides the homeowner with a false sense of security, when in reality the bank wants to do nothing more than foreclose.
The ban on dual tracking prohibits the recording of a notice of default, notice of trustee's sale and the conducting of sale while a loan modification application is pending.
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.
There are also provisions which establish procedures to be followed in connection with the modification application. In addition, there are definite steps that must be taken by the servicer, should the servicer deny a modification application. Finally, the new law sets out very specific procedure to be followed in the event a borrower wishes to appeal the denial of a modification.
The enforcement provisions of the Bill of Rights authorize a borrower, who is forced to litigate with his/her lender, to seek an injunction and damages for violations of certain of the provisions described above. Under its provisions, for the first time in the state of California, a homeowner will be able to secure injunctive relief without having to cure arrears or post expensive bonds.
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 also changes to the notice provisions of a Trustee's Sale. These changes include the requirement that written notice be given to the borrower after the postponement of a Trustee's Sale.
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.
Today, while there are certainly parts of the California where the real estate market is 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.
Key provisions of California's recent legislation include a ban on the practice of "dual tracking." For those unfamiliar with this term, "dual tracking" is the practice whereby the lender gives the illusion of working with the borrower to secure a modification, while at the same time foreclosing. Such a practice provides the homeowner with a false sense of security, when in reality the bank wants to do nothing more than foreclose.
The ban on dual tracking prohibits the recording of a notice of default, notice of trustee's sale and the conducting of sale while a loan modification application is pending.
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.
There are also provisions which establish procedures to be followed in connection with the modification application. In addition, there are definite steps that must be taken by the servicer, should the servicer deny a modification application. Finally, the new law sets out very specific procedure to be followed in the event a borrower wishes to appeal the denial of a modification.
The enforcement provisions of the Bill of Rights authorize a borrower, who is forced to litigate with his/her lender, to seek an injunction and damages for violations of certain of the provisions described above. Under its provisions, for the first time in the state of California, a homeowner will be able to secure injunctive relief without having to cure arrears or post expensive bonds.
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 also changes to the notice provisions of a Trustee's Sale. These changes include the requirement that written notice be given to the borrower after the postponement of a Trustee's Sale.
The Homeowners Bill of Rights can be found in the recent amendments and additions to the California Civil Code Sections relating to mortgages.
About the Author:
Looking to find the best real estate and foreclosure assistance, then visit www.losangelesrealestateattorney.com for advice on real estate, foreclosures, modifications and short sales. .
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