California's top lawyer is constructing a legal task force to handle cases that could surface under the state's new Homeowner Bill of Rights.
California Attorney General Kamala Harris said the HBOR program issued a $1 million grant to the The National Housing Law Project. The funds will support a powerhouse team of lawyers to investigate and potentially prosecute cases under the homeowner-focused legislation.
The California HBOR became law on Jan. 1 and is known in the servicing industry as legislation that creates a private right of action for borrowers when certain foreclosure violations are alleged. It also codified dozens of legal risks for servicers who utilize the nonjudicial foreclosure process.
The goal of the grant is to provide training to 800 California consumer and housing attorneys from both private and nonprofit firms through on-site training and webinars on how to maximize the HBOR’s protections.
The grant also will support cases that raise legal issues, while creating a library of litigation materials to help attorneys maximize the HBOR’s benefits and establish a report that analyzes the statewide impact of the laws.
While this project seems like an innovative idea on paper, market experts are hesitant about what the outcome could mean for the mortgage servicing industry.
Michael Waldron, a partner at Ballard Spahr, told HousingWire it's still uncertain if this is going to truly get firms involved in cleaning up the foreclosure crisis and whether this is the best solution for borrowers?
Waldron is skeptical, wondering if lawyers prosecuting or investigating the cases will have a preconceived goal that prompts them to manipulate the system regardless of the content behind their suits.
Waldron remains open-minded, saying "if it's done well" and creates more aid for borrowers, while cutting down on court waste, then it could be worthwhile.
"But if this really is just used as a tactic by these groups and by folks that otherwise underutilized their practice areas, then I’m not sure that this doesn’t create more noise for the borrower," he explained.
However, California AG Kamala Harris believes this will benefit Californians who were hit hard by the foreclosure crisis.
"The California Homeowner Bill of Rights gives borrowers more opportunities to stay in their homes, and this grant will help make sure the law is applied across the state and that everyone gets the protections they are entitled to," she said.
The $18 billion National Foreclosure Settlement secured funds provided through this grant.