New California Homeowner Bill of Rights

   The legislature has passed two pieces of legislation which together are known as the Homeowner Bill of Rights. They are awaiting Governor Brown’s signature and will take effect, if signed, January 1, 2013.

   The new laws will affect owner-occupied property of 4 units or less and servicers who conduct more than 175 foreclosure sales per year. They restrict “dual tracking”; aim to prevent inaccurate, incomplete, and unsupported foreclosure documentation, i.e., “robo-signing”; provide for a single point of contact for borrowers pursuing loss mitigation; and provide borrowers new private rights of action, including injunctive relief and damages (including attorney’s fees) for violations of specified material provisions. Additionally, the greater of treble damages or $50,000 may be awarded for intentional, willful, or reckless, violations of those material provisions.

  The legislation also includes new notice and disclosure requirements. For example, whenever a foreclosure sale is postponed for 10 business days or more, the mortgagee will be required to provide the borrower with written notice of the new sale date and time within 5 business days of the postponement. Currently, most loan servicers refuse to provide any written verification of postponement.

   These are welcome, common sense provisions to the statutes which regulate foreclosure. They provide greater certainty and more protection to homeowners. Unfortunately, while some servicers have already implementing some of these new provisions into their foreclosure process, the law does not take effect for six more months. More about this new legislation can be found here.