Dear Marjorie: I’ve heard about something called the “California Homeowner Bill of Rights” What is it? And what does it mean to the average homeowner?
Madge: In California, according to the Lender Processing Service, there were 160,541 completed short sales during a 12-month period ending June 30, 2012. In this same period, Florida’s short sale tally topped 99,620 and Arizona’s tally came in at 51,872. As the volume of short sales continues to grow, and with the aforementioned states constituting some 45 percent of all short sale transactions nationwide, a provision to help struggling homeowners keep their homes is potentially a really big deal! And it all started right here in California with Governor Jerry Brown wielding his mighty pen and signing into law July 11, 2012 the “California Homeowner Bill of Rights.”
Let’s summarize the key provisions of the bill, also known as Assembly Bill 278 and Senate Bill 900 which will officially go into effect on January 1, 2013.
Who is affected?
Owner-occupied properties which are one-to-four residential units and are secured by first trust deeds. “Owner-occupied” means the property is the principal residence of the borrower. Note that someone who has filed bankruptcy, surrendered the secured property or engaged a company/organization who advises people how to prolong the foreclosure process and/or avoid their contractual obligations to pay their lenders; they will not be able to benefit from this bill.
There is no dual tracking. If a foreclosure prevention alternative, such as a short sale, has been approved in writing by all parties including the junior lien holder then the mortgage servicer or lender cannot record a notice of default or notice of sale or conduct a trustee’s sale on the borrower’s property. So, no more pulling the rug out from underneath the homeowner.
There is a single point of contact. For those requesting a foreclosure prevention alternative the mortgage servicer must, upon request, promptly establish and clearly provide a direct means of communication with a single point of contact. This contact will stay in place throughout the entire process. This single point may consist of an individual or a ‘team’ all of which are intimately familiar with the file and have access to those with the authority to stop foreclosure proceedings or if the borrower requests referral to a supervisor.
There is an acknowledgement of the application. The mortgage servicer must provide the borrower written acknowledgement of receipt of a complete first lien modification application within five business days of the borrower’s submission. The operative word here is “complete” application. The acknowledgement must provide a description of the loan modification process, timeline for decisions and highlighting any deficiencies in the borrower’s application.
These are but a few of the important points covered in the new bill. For a complete copy of the California Homeowner Bill of Rights contact me. It’s free and there is no obligation. The first line of defense of your rights is to know what they are!
Marjorie Tyson is a real estate agent for Prudential California Realty. She can be reached at 310-780-6698.
