California has recently reformed some of the foreclosure process in order to better protect homeowners.
One of the most important changes of the law was to ban dual tracking. Before, lenders were allowed to start the proceedings of a foreclosure while a modification of the loan application was pending. Thanks to this new set of laws, lenders must make the decision to grant or deny the loan modification application before starting or continuing the foreclose process. Even if they deny the application, they still can’t go on with the foreclosure process before the appeal period has expired. Basically this new law affords homeowners more time before being foreclosed.
Another important change is that lenders must now designate a single point of contact for the homeowner who applied for loan modification.
Before, homeowners sometimes had to deal with several agents, that didn’t know anything about their case. Since 2013, there will be only one point of contact (an individual or a team) that must have knowledge of the homeowner’s status; information regarding alternatives; access to decision makers and the responsibility to coordinate the flow of documents between the homeowner and the mortgage servicer.
The third important addition of the Law is the penalty for “robo-signing”. Representatives of the lender can incur a civil penalty up to $7500.00 per loan, for signing foreclosure documents without reading them or without verifying the information that they contain.
The Homeowner bill of rights generally applies to the 1st lien mortgage loan for properties that are owner-occupied; residential and contain no more than four units.
In California the most common process of foreclosure proceedings is the non-judicial foreclosure and deficiencies judgments (going after the remaining amount owed by the borrower if the foreclosure didn’t cover the loan entirely) are not allowed!
For more information about the California Homeowner Bill of Rights, please consulthttp://www.oag.ca.gov.