Monday, July 9, 2012

California passes mortgage servicing and foreclosure mitigation legislation

by Sarah Jawaid, National Housing Conference

California legislators passed a set of bills (SB900 and AB278) July 2 that aim to stop abusive mortgage servicing practices and help homeowners avoid foreclosure. The bills, expected to be signed by Governor Jerry Brown soon, make dual tracking unlawful, a process used by servicers to expedite the foreclosure process even if families are in talks with the servicer to modify their mortgage. They also make “robo-signing,” or signing foreclosure documents without review, illegal. California is one of the hardest hit states in the country, and these bills are a state-level effort building on the national mortgage settlement earlier this year.

An opposing view comes from the California Mortgage Bankers Association in their “Call to Action”, where they warned that “in order to for the real estate market and our national economy to recover, it is vital that we support efforts to restore certainty to the mortgage market while avoiding an overreaction that causes harm down the road. Unfortunately, these bills work contrary to that goal, and would harm the California economy by sharply curtailing consumer choice and costing the state jobs.”

Read the full story from Reuters for more information.

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