LOS ANGELES (KCBS / AP) — California has a new law to stop what Gov. Jerry Brown calls abusive home lending tactics.
The Democratic governor signed the law Wednesday at a ceremony in Los Angeles.
Also known as the “Homeowners Bill of Rights,” it makes the state the first to write into law much of the national mortgage settlement negotiated this year with the nation’s top five banks, and expands it to all lenders.
It prohibits lenders from seizing a home while considering homeowner requests for alternatives to foreclosure. It also lets homeowners take legal action to stop foreclosures and seek monetary damages if a lender violates state law.
Brown said the state is still feeling the effects of the mortgage crisis.
“People who’ve been victimized and who might be victimized in the future are getting protections,” Brown said, adding that the abuses had been rampant in many parts of the country including California.
The governor signed the bill amid raucous applause at the state building in downtown Los Angeles before making his way to San Francisco to tout the new law.
KCBS’ Chris Filippi Reports:
Lenders and legislative critics said the law does nothing to address the underlying problem: too many borrowers can’t afford their house payments.
The law that takes effect Jan. 1 was opposed by most Republican legislators.
Attorney General Kamala Harris said some banks are already onboard.
“We are done with robo-signing” Harris said.
The attorney general said there are about 700,000 homes in the foreclosure pipeline in California.
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