On July 10th, Governor Brown signed the CA Homeowner Bill of Rights into law. Californians have made history again being the first state to adopt such a bill, in the effort to help distressed homeowners to stay in their home.
In between 2008 to 2011, more than one million California distressed homeowners lost their home to foreclosure and currently more than $500,000 are in danger of going into foreclosure.
Currently, if a distressed homeowner is seeking a loan modification, the bank can still foreclose on their home while taking their time to review their request. Under the CA Homeowner Bill of Rights, will end dual tracking and the lender will have to render a decision on the loan modification application before proceeding with foreclosure.
Concern: Although the bill will help homeowners by slowing down the foreclosure process…imposing this delay, raises costs. The rise in cost, ultimately will affect qualified first-time homebuyers.
Currently, distressed homeowners are uncertain who to contact in order to receive some type of assistance with their homeownership needs. Distressed homeowners end up speaking with several representatives often in the incorrect department to receive some type of help. Under the CA Homeowner Bill of Rights, lenders will be required to designate a Single Point of Contact (SPOC), to assist homeowners in risk of default and potentially eligible for a loan modification. This designated SPOC must have knowledge of the homeowners’ loan, direct access to decision makers, and will be accountable to the homeowner throughout the loss mitigation process until all options for foreclosure prevention alternatives have been exhausted or the homeowners’ loan becomes current. The only bank that I am aware that is currently assigning a point of contact is Chase Home Mortgage.
The CA Homeowners Bill of Rights goes into effect on January 1, 2013 and once in effect will protect homeowners and borrowers during the mortgage and foreclosure process. This new law will only affect borrowers of certain banks; smaller banks are not affected by this new law.
As a Real Estate Professional, I speak to numerous concerned homeowners who just want to know how they can keep their home versus going into foreclosure. This new law is definitely progress and will hopefully provide the reliefs for struggling homeowners are seeking. In addition, I have only highlighted two of the many provisions within this new law. I would highly recommend reading and becoming familiar with this new law as it most definitely will affect the way that we do business.
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