The California Homeowner Bill of Rights passed both houses of the California legislature on July 2, 2012, and now awaits the governor’s signature or veto.
If signed by the Governor, the legislation would require all banks that provide first loans to homeowners who occupy their home to:
- Stop “dual-tracking” – when a bank proceeds with a foreclosure while a homeowner is seeking a loan modification
- Provide a single point of contact, rather than the usual runaround
- Give borrowers a clear explanation of why they reject a loan modification
- Verify mortgage documents before a foreclosure and provide copies to borrowers on request (with fines of $7,500 per loan for filing and recording unverified documents)
The legislation also provides borrowers with a limited “right of action” to sue lenders under specific circumstances.