Governor Brown Signs Homeowner Bill of Rights

Homeowner’s Bill of Rights (Assembly Bill 278 and Senate Bill 900) has been signed into law by Governor Brown and will go into effect January 1, 2013.

This is very important victory for those homeowners that are struggling with their mortgage payments or have potential mortgage issues coming up in the near future.

For too long, homeowners have been at a disadvantage when fighting to save their homes from foreclosure. Real estate professionals have teamed up with homeowners in an effort to save their home or at least attempt to avoid a foreclosure, just to be disappointed in the end because of poor communication between the banks, asset managers, processors, etc. The goal is to be “soft on the people”, but “hard on the problem”, and it looks like that is now going to be happening.

The Homeowner’s Bill of Rights will end the “dual tracking” process, and require lenders to be more accountable for their actions. If lenders do not abide by the new procedures established in these measures, homeowners now have the right to seek legal action.

Summary of the applicability of the law:

Applicability of the Law:

This law will generally come into effect on January 1, 2013. It only pertains to first trust deeds secured by owner-occupied properties with one-to-four residential units, unless otherwise outlined in the law. "Owner-occupied" means the property is the principal residence of the borrower and secured by a loan made for personal, family, or household purposes (CC 2924.15). A "borrower" under this law must generally be a natural person and potentially eligible for a foreclosure prevention alternative program offered by the mortgage servicer, but not someone who has filed bankruptcy, surrendered the secured property, or contracted with an organization primarily engaged in the business of advising people how to extend the foreclosure process and avoid their contractual obligations (CC 2920.5(c)). A "foreclosure prevention alternative" is defined as a first lien loan modification or another available loss mitigation option, including short sales (CC 2920.5(b)). Some of the requirements of this law do not apply to "smaller banks" that, during the preceding annual reporting period, foreclosed on 175 or fewer properties with one-to-four residential units (CC 2924.18(b)).

The full text of this law, also known as the Homeowners Bill of Rights (Bill ID: AB0278), is available at www.leginfo.ca.gov.See More

Official California Legislative Information

www.leginfo.ca.gov