Like many other states, California has what is known as a homeowners bill of rights. The California Homeowners Bill of Rights (HBOR) was first instituted in July 2012 after being signed into law by Governor Jerry Brown. The HBOR was an outgrowth of a settlement reached between the attorneys general of 49 states and the District of Columbia of a lawsuit against several large lenders involving claims of foreclosure abuses and predatory lending practices. After being signed into law by Governor Brown in July 2012, the HBOR officially became effective on January 1, 2013 with the stated aim of ensuring fair lending and preventing fraudulent borrowing practices in the wake of the predatory lending and dodgy foreclosure tactics utilized by many financial institutions leading up to the 2008 financial crisis. The HBOR spells out a series of practices that lenders and financial institutions cannot engage in and also streamlined the foreclosure process in California. It also set out documentation requirements before a lender could foreclose on a home in California, required that lenders designate a single contact person that struggling borrowers could contact who had knowledge of the borrower's loan, and also prohibited lenders from "dual-tracking" a mortgage, or pursuing foreclosure proceedings while the lender was also discussing a potential mortgage modification with a struggling home borrower.
The recent changes to the HBOR are a mixed bag, with some benefitting lenders more than homeowners, while other changes benefit homeowners more than the previous version of the HBOR did. Regardless, if you are facing foreclosure or think you may be in danger of facing foreclosure in California, you should contact an experienced California foreclosure defense lawyer to discuss your particular situation and what you can do in order to save your home.
A number of changes were made to the HBOR in 2018 that affect California homeowners. First, certain provisions in the HBOR expired on January 1, 2018 were replaced by new rules that automatically went into effect on January 1st. In many instances, the new provisions are unfortunately less onerous on lenders and financial institutions than their predecessor provisions under the HBOR. However, some of the changes benefit homeowners homeowners in ways the old version of the HBOR did not.
One of the most significant changes in the amendments to the HOBR removed the distinction between servicers conducting more or less than 175 annual foreclosures in California. In most respects, all servicers are treated the same going forward. This is a positive development for California homeowners, because there is now no distinction between lenders that have foreclosed on more or less than 175 homeowners in California in the past year. Therefore, if you borrowed from a larger lender to buy your home, then you may now have more protections under the HBOR.
In another positive development for California homeowners, loan servicers used to be prohibited from proceeding with foreclosure only on the basis of receipt of a completed mortgage modification application. However, they are now prohibited from pursuing foreclosure proceedings upon receipt of a “complete application for a foreclosure prevention alternative.” This includes if a borrower applies for or requests in writing either a short sale, a loan modification or the lender agrees to enter into a new repayment agreement. Therefore, a borrower not has broader protections against foreclosure proceedings being initiated by the lender if, for example, the borrower applies to conduct a short sale of his or her home.
In terms of changes that were positive for lenders, lenders no longer have to give as much notice when filing a notice of default against a struggling borrower. Previously, before the 2018 HBOR changes became effective, lenders were required to provide written notice to a borrower describing possible foreclosure prevention alternatives in writing within five days of recording a notice of default. In addition, there also is now no $7,500 penalty for lenders or financial institutions who engage in repeat violations of the HBOR by filing repeated inaccurate mortgage documents.
For many California homeowners, facing foreclosure is the homeowner’s worst nightmare. A stranger may show up at your front door with a piece of paper that tells you that your home will be sold at auction because you got behind on your mortgage. You may feel like you have no recourse whatsoever, that the deck is stacked against you and that soon you will be on the streets or living in a shelter. However, this does not have to be the case. If you are facing foreclosure, there are more options available than you may be aware of depending on your particular situation. For more information on how our experienced foreclosure defense attorneys can potentially halt your foreclosure, postpone your sale date, or prevent a trustee sale entirely, give us a call today at (888) 529-3111 or email us at email@example.com.
JT Legal Group is a Los Angeles-based law firm focusing on California foreclosure defense, real estate law, and personal injury representation. Our attorneys fight to keep families in their homes, take lenders to court for unscrupulous and overly aggressive foreclosure actions which violate the HBOR, and give an empowered voice to California homeowners who are being taken advantage by a predatory lender.