Melissa Griffin: California Foreclosure Protection, 'Chicken' Law Fallout
Before leaving for a break, state representatives passed the Homeowner's Bill of Rights to protect Californians from confusing and underhanded loan practices. Meanwhile, Republicans in Washington, D.C. react to a California chicken law.
SAN FRANCISCO (CBS 5) - With California lawmakers on summer recess until August 6, you can bet constituents will be mighty unhappy that billions in high speed rail funding got approved while pension reform is going nowhere. When confronted by angry voters, there is one piece of legislation Democrats can point to: the Homeowners Bill of Rights.
Passed on Friday, July 6 and already signed by the Governor, this brand-new law is modeled after requirements imposed on certain banks as part of nationwide $25 billion dollar disclosure settlement.
Overall, its purpose is to protect homeowners from the confusing and byzantine process of refinancing and foreclosure. Specifically, it requires
(a) Mortgage servicers must provide a single point of contact for borrowers
(b) No "dual tracking" whereby banks initiate the foreclosure process before completing refinancing efforts.
(c) Documented verification that whoever is foreclosing has a right to do so. This is meant to prohibit banks from foreclosing without clear title to the property.
The law only applies to owner-occupied properties and the first mortgage on those properties - so a second mortgage or home equity line wouldn't qualify.
Republicans in the legislature opposed the bill, saying it is unnecessary and that it will only make it harder to get a mortgage in California because banks will be reluctant to give new loans in a place with so many restrictions.
Democrats who passed the bill say the state is in crisis and since unlike other states, California doesn't require a judicial review of foreclosures, we need to find other ways to safeguard the process.
The law will go into effect on January 1, 2013.
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You may recall that in 2008, voters passed Proposition 2, which imposed humane standards on chicken farms in California. The law is set to go into effect in 2015. In preparation for that law, State Assemblyman Jared Huffman introduced legislation that would forbid the sale of eggs in California from any farm in other states that does not comply with the Prop 2 standards.
Rep. Steve King (R-Iowa) was incensed because his state produces more eggs than any other and they're not interested in complying with our chicken coop specifications in order to sell here. So last week King proposed an amendment to the federal farm bill to prohibit states from imposing standards on out-of state agricultural products. (In-state producers would still be subject to all the state's rules, which would just put them at a huge disadvantage relative to producers in other places.)
Basically, as long as an "agricultural product" is USDA approved, states would have to allow it to be sold. Note that the definition of "agricultural product" is very broad, encompassing fruits and vegetables, livestock, poultry, and fish. The amendment passed in the Agriculture Committee.
If this amendment remains in the legislation it would be significant for California. The state's prohibition on foie gras, for example, would effectively be nullified.
Said Wayne Pacelle, president and chief executive of the Humane Society of the United States, "The scope of this amendment is so absurdly far-reaching that it's even difficult to talk about."
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