New Law Bodes ill for Lenders in California

There is a new bill that was written into law called the Homeowner Bill of Rights. It became a new law about six months ago and has been helping homeowners that have no more hope since 2012, which is when it took effect.

A resident in Sacramento named Kevin Singh was the first to make sure of the new law. This homeowner had fallen behind in his mortgage payments and was in dire need of help. With the new law, Singh could put his foreclosure auction on hold after it was found that Bank of America was engaging in something called dual tracking.

Dual tracking is when a homeowner applies for a loan modification and a bank still continues to pursue a foreclosure against them. With the new law, a bank can be issued a primary injunction.

The great thing about this law is that it lowers the incidence of dual tracking and encourages lenders to follow the law. Under this law, the court can freeze the title of the house and then hit the bank with a motion to pay all fees and costs that go along with their penalty. This law is a great help to struggling homeowners because it finally coerces banks into negotiating more than they did in the past with homeowners.

Besides helping to minimize dual tracking, this bill makes it easier for homeowners to contact their lenders. Sometimes a bank’s staff isn’t quick enough with dealing with homeowners’ requests. This law puts a few general regulations in order so that homeowners are aware of their mortgage’s status.

According to this bill, lenders must issue a 90-day notice before a house is foreclosed upon, make the statute of limitations bigger for mortgage-related crimes and have lenders ensure the accuracy of any documents submitted to them.