Important Foreclosure Bill Moves Forward in Calif. Legislature

Senate Banking Committee approves a 'modest proposal'

SACRAMENTO, Calif., April 7 /PRNewswire-USNewswire/ -- The Senate Banking, Finance and Insurance Committee today approved a measure that would better protect California homeowners going through the loan modification process by a 7-1 vote at the time of passage.

"We will get a lot of bang for our buck out of this bill," said Paul Leonard, director of the California office of the Center for Responsible Lending.  "It's a modest proposal, but it could do a world of good for Californians who are faced with losing their homes."

SB 1275, authored by Sens. Mark Leno (D-San Francisco) and Darrell Steinberg (D-Sacramento) contains two major provisions.

• The Obama administration recently announced several changes to the Home Affordable Modification Program (HAMP).  A key element of those changes now requires that loan servicers complete an evaluation of a borrower's eligibility for a loan modification BEFORE they begin the foreclosure process – but it only applies to participants in the voluntary HAMP program.  SB 1275 would apply that same principle to all servicers doing business in California, whether they are HAMP participants or not.
• Currently, homeowners who have been erroneously foreclosed upon have no recourse.  But if a family loses their home not because they couldn't make payments or didn't remain in communication with the servicer but because the servicer couldn't keep up with its faxes, those homeowners deserve at least a modest chance to right that wrong.  The remedy in SB 1275 would apply only to those who have already lost their homes to foreclosure, and in most cases would be limited to $10,000.  

"Laws are not being broken," said Sen. Leno of the servicer mistakes that can ultimately cost Californians their homes.  "That's why we need new laws."

The Senate Banking Committee will hear the bill again after it is heard in the Senate Judiciary Committee on April 20.

About the Center for Responsible Lending

The Center for Responsible Lending is a nonprofit, nonpartisan research and policy organization dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices. CRL is affiliated with Self-Help, one of the nation's largest community development financial institutions.

SOURCE Center for Responsible Lending

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

440k+
Newsrooms &
Influencers

9k+
Digital Media
Outlets

270k+
Journalists
Opted In

GET STARTED