California Fights Bank Foreclosures
California Attorney General Kamala Harris has called her state the "epicenter" of the foreclosure and mortgage crisis having, in the year 2011, seven of the nation's 10 hardest-hit cities by foreclosure were in California.
As result of the decimation of the California real estate market, California has been called the "epicenter" of the foreclosure and mortgage crisis. According to a recent report, in 2011, seven of the nation's 10 hardest-hit cities by foreclosure were in California.
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 such horrific statistics, on July 11, 2012, in order to stem the wave of foreclosure, California enacted into law a "Homeowner Bill of Rights" for the purpose of aiding embattled homeowners.
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 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 protection provided by the new legislation is the requirement that mortgage servicers designate a "single point of contact" for borrowers who are potentially eligible for a loan modification. The single point of contact be responsible to coordinate the flow of documentation between borrower and mortgage servicer and be knowledgeable about the borrower's status and foreclosure prevention alternatives.
Also newly established are procedures in connection with modification applications, their processing, denial and rights of appeal.
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.
As to the damage component, the Homeowner Bill of Rights 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. Borrowers may also receive attorneys' fees in connection with litigation under the act.
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.
More information about California's Homeowners Bill of Rights legislation can be found in: Civil Code 2920.5, 2923.4, 2923.5, 2924, 2923.6, 2923.7, 2923.55, 2924.9, 2924.10, 2924.11, 2924.12, 2924.15, 2924.17, 2924.18, 2924.19 and 2924.20
As result of the decimation of the California real estate market, California has been called the "epicenter" of the foreclosure and mortgage crisis. According to a recent report, in 2011, seven of the nation's 10 hardest-hit cities by foreclosure were in California.
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 such horrific statistics, on July 11, 2012, in order to stem the wave of foreclosure, California enacted into law a "Homeowner Bill of Rights" for the purpose of aiding embattled homeowners.
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 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 protection provided by the new legislation is the requirement that mortgage servicers designate a "single point of contact" for borrowers who are potentially eligible for a loan modification. The single point of contact be responsible to coordinate the flow of documentation between borrower and mortgage servicer and be knowledgeable about the borrower's status and foreclosure prevention alternatives.
Also newly established are procedures in connection with modification applications, their processing, denial and rights of appeal.
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.
As to the damage component, the Homeowner Bill of Rights 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. Borrowers may also receive attorneys' fees in connection with litigation under the act.
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.
More information about California's Homeowners Bill of Rights legislation can be found in: Civil Code 2920.5, 2923.4, 2923.5, 2924, 2923.6, 2923.7, 2923.55, 2924.9, 2924.10, 2924.11, 2924.12, 2924.15, 2924.17, 2924.18, 2924.19 and 2924.20
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