Gov. Jerry Brown on Wednesday signed into law legislation aimed at increasing protections for California homeowners facing the possibility of foreclosure.
The legislation seeks to curb "dual tracking" by prohibiting lenders from starting the foreclosure process while a loan modification is being negotiated, expands notice requirements as part of the foreclosure process and requires large institutions to give borrowers a single point of contact for dealing with their loan issues. It also gives borrowers opportunities to go to court if they are wrongly foreclosed upon and the bank does not correct its mistakes.
"Californians should not have to suffer the abusive tactics of those who would push foreclosure behind the back of an unsuspecting homeowner," Brown said in a statement. "These new rules make the foreclosure process more transparent so that loan servicers cannot promise one thing while doing the exact opposite."
The law stems from a legislative package that Attorney General Kamala Harris pushed for in the wake of a national mortgage settlement reached with 49 states and major lenders. Harris, who appeared with Brown at the bill-signing ceremony, said in a statement that the legislation will "give struggling homeowners a fighting shot to keep their home."
Brown signed two identical bills containing the language, Assembly Bill 278 and Senate Bill 900, which were drafted by a two-house conference committee controlled by legislative Democrats. The Legislature approved the legislation last week.
The law, which takes effect Jan. 1, makes California the first state to put into law and expand to other borrowers major provisions contained in the national mortgage settlement. California was awarded $18 billion as part of that agreement.
California lawmakers approve homeowner-rights mortgage legislation
Stalled mortgage bills headed for joint conference committee
Senate GOP cries foul over procedural move on mortgage bills
Barack Obama pushes mortgage relief in Reno
Editor's note: This post was updated at 5:22 p.m. with a statement from Harris.