California Lawmakers Approve Bill To Make Mortgage Reform Permanent
SACRAMENTO (KCBS) — In order to prevent further foreclosure abuse, California’s State Assembly and Senate both passed a package of protections for homeowners on Monday. If signed into law, California would be the first state to turn the national mortgage settlement into a state law.
The Homeowner’s Bill of Rights, which lawmakers said bans some of the practices that led to the foreclosure crisis, now goes to Governor Jerry Brown who hasn’t said whether or not he’ll sign the bills.
The measure, negotiated by majority Democrats, passed despite opposition from business and lending organizations.
It requires large lenders to provide a single point of contact for homeowners who want to discuss loan modifications. It also prohibits lenders from foreclosing while the lenders consider homeowners’ request for alternatives to foreclosure. In addition, the bill would let homeowners sue lenders to stop foreclosures or seek monetary damages if the lender violates state law.
Jose Vega of Pittsburg said he lost his house when Chase foreclosed on it even though another division at the bank had already modified his loan.
“What they don’t realize is the harm that this is causing American families. This goes way beyond me losing a house,” Vega said. He added that his children have suffered because they don’t understand why they have to give up their rooms or why he and his wife fight all the time because of the stress generated by the foreclosure.
KCBS’ Doug Sovern Reports:
Republican Assemblyman Tim Donnelly voted against making those provisions permanent, which are temporary in the national settlement.
“This goes too far. This solution is a California-only solution, we’re pre-empting a federal package that we’re not even sure how well it’s going to work. We do this at the expense of our economy,” Donnelly said.
If Governor Brown signs, the bills will take effect in January.
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