It looks like California law makers are coming to bat for struggling homeowners in an effort to combat the state’s massive foreclosure crisis. On January 8th state senators Corbett and Steinbergco-authored with senator Leno foreclosure bill, SBX8 38 to help the stem the tsunami of foreclosures that has wreaked havoc across the state.
Below are some of the contents of the bill that is intended to help struggling California homeowners receive adequate assistance from their mortgage servicers when facing foreclosure.
- Prior to filing a notice of default (for mortgages or deeds of trust recorded prior to December 31, 2009) that are secured by owner occupied residential real property (1 to 4 dwelling units), the mortgagee, trustee, beneficiary or author agent must provide a borrower with a new notice of “Rights And Foreclosure Options” and an application for a loan modification.
- Prior to filing a notice of default the borrower must also be notified as to whether the application for loan modification has been approved or denied. And if denied, the servicer MUST provide a detailed letter describing the reason for the denial.
- The bill would prohibit the mortgagee servicers from combining collections activity with communication with the borrower about foreclosure avoidance options.
This bill would be an effect until January 1, 2013,
The California Constitution authorizes the Governor to declare a fiscal emergency and to call the Legislature into special session for that purpose. The Governor issued a proclamation declaring a fiscal emergency, and calling a special session for this purpose, on January 8, 2010.
You can read the full contents of the bill here.
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