The Homeowner's Bill of Rights

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.

All told, in the last three years with California suffering from a prolonged real estate slump,  more than one million California homes were lost to foreclosure. Not just in foreclosure pipeline, but lost.  
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. 

In order to stem the wave of foreclosure, on July 11, 2012,  California 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.

In addition, mortgage servicers will be required to designate a “single point of contact” for borrowers who are potentially eligible for a loan modification. The new law requires 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. 
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.

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. In addition to injunctive relief, California’s Homeowner Bill of Rights authorize 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. Prevailing borrowers may also receive attorneys' fees.

Other changes include changes to the notice provisions of Trustee’s Sales. Formerly, a Trustee’s Sale could be continued for as much as a year without written notice being provided to the borrower of the continued date. Under the new law, once foreclosure begins, if a Trustee’s Sale date is postponed, the new law requires that written notice be given to the borrower after the postponement in order to advise the borrower of any new sale date and time.

Newport Beach Real Estate Attorneys are ready to help you with any real estate matter, whether it be for business litigation, property disputes, construction disputes, title matters, contracts, bankruptcies, business formations, timeshare litigation or student loan adjustments.

Visit Newport Beach Real Estate Attorneys at https://www.newportbeachrealestateattorney.com/contact) or call (800) 233-8521 for a free phone consultation.