3 quick takeaways from the mortgage conference happening right now

3 quick takeaways from the mortgage conference happening right now

Tidbits from SourceMedia Mortgage Servicing conference

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Servicing

Homeowner Bill of Rights signed into law

California Gov. Jerry Brown signed into law the Homeowner Bill of Rights, a hotly debated piece of legislation that will reform foreclosure practices in the state.

Among other things, the bill ends dual tracking, in which banks were permitted to foreclose on homeowners while they were negotiating for a loan modification with their lender.

The legislation also institutes a single point of contact for homeowners who will no longer have to speak to a different person at the bank every time they call.

If a bank does not follow the new procedural rules, California homeowners can take the bank to court.

The bill was introduced by Attorney General Kamala Harris and championed by consumer advocates and homeowners.

Residing within it is the Foreclosure Reduction Act, which restricts the dual-tracked foreclosures and the Due Process Rights Act, which guarantees a single point of contact for struggling homeowners. Both were passed last week. The latter also imposes civil penalties for fraudulently signing foreclosure documents without verifying their accuracy, a practice that became known as the robo-signing scandal.

The bill, which takes effect on Jan. 1, 2013, will impose stricter rules on mortgage servicers seeking to nonjudicially foreclose on homes with mortgages in default and is expected to expose mortgage servicers to substantial new legal liability. Many industry groups argued the new legislation could add to the financial burden of distressed homeowners.

“The legislation extends the impact of the national mortgage settlement so that all homeowners in California, regardless of which bank services their loan, have the same protections and rights,” said Kevin Stein of the California Reinvestment Coalition. “This legislation should serve as a national model for other states looking to enforce the settlement and protect homeowners.”

jhilley@housingwire.com

@JustinHilley

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