California Legislation Fights Ongoing Foreclosure Crisis

SAN JOSE (KCBS) – A new package of legislation is making its way through Sacramento which requires that banks offer borrowers loan modifications before foreclosing on their homes.

The measures are all part of the state’s efforts to fight the ongoing foreclosure crisis.

KCBS’ Matt Bigler Reports:

67-year-old Darlene Bowland is one of the thousands facing foreclosure. She has lived in her south San Jose home for over 40 years.

“I’m still in my home for right now anyway,” she said.

Bowland has decided to fight back with an attorney, but said others in her situation need more help before being turned out of their homes.

“Something has to be done. It just shouldn’t be like this in this country,” said Bowland.

Lawmakers and community activists are doing something, with a new slate of bills known as the Homeowners Protection Act.

David Sharples with the San Jose Alliance for Californians for Community Empowerment said the legislation would require that lenders offer borrowers loan modifications before foreclosing, and banks would be charged a hefty fee if there is a foreclosure.

“The $20,000 foreclosure fee we think will act as a deterrent to banks foreclosing on people,” said Sharples.

Mark Skilling with Foreclosureradar.com said the fees may help homeowners in the short term, “but we have to remember that lenders are going to pass that cost on to borrowers in the future.”

He said foreclosure filings dropped by 10 percent in Santa Clara and San Mateo Counties last month.

(© 2011 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

Comments

One Comment

  1. Brenda Reed says:

    What is to prevent the government from becoming an “interested party” in the foreclosure efforts being made by banksters? What prevents the banksters from billing this fee right back on the homeowner?

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