Calif. passes key provisions of Harris' homeowner bill package

Jessica M. Karmasek Jul. 3, 2012, 11:20am


SACRAMENTO, Calif. (Legal Newsline) - Key provisions of California Attorney General Kamala Harris' so-called Homeowner Bill of Rights passed the state Legislature Monday.

The bills, which provide protections for homeowners and reforms to the mortgage and foreclosure process, were approved 53-25 in the state Assembly and 25-13 in the Senate.

The legislation is now headed to Gov. Jerry Brown's desk for consideration.

"Passing these key elements of Homeowner Bill of Rights represents a significant step forward for struggling homeowners," Harris said in a statement Monday.

"These common-sense reforms will require banks to treat California homeowners more fairly and bring more transparency and accountability to their practices in our state. Responsible homeowners will have a better shot to keep their homes."

Senate President Pro Tem Darrell Steinberg, D-Sacramento, applauded his fellow lawmakers for passing the bills.

"Californians will finally have a fighting chance to keep their homes, as this measure brings fairness to the loan modification and foreclosure process," he said in a statement. "At the same time, the protection gained by homeowners will help stabilize the housing sector of our economy."

Assembly Speaker John Perez, D-Los Angeles, called Monday's votes a "major victory" for the state's consumers.

"We impose tough new regulations on banks and lenders to stop the abusive practices we've seen since the collapse of the housing market, and this package will bring relief to hundreds of thousands of California homeowners," he said in a statement.

The two bills, Assembly Bill 278 and Senate Bill 900, were voted on after being passed last week by a two-house conference committee.

The one restricts the process of "dual-tracked" foreclosures.

The other guarantees a reliable contact for struggling homeowners to discuss their loan with and, for the first time, imposes civil penalties on the practice of fraudulently signing foreclosure documents without verifying their accuracy, otherwise known as "robo-signing."

The bill also imposes civil penalties, of up to $7,500, on the repeated filing of foreclosure documents without verifying their accuracy -- otherwise known as "robo-signing."

In addition, homeowners may require loan servicers to document their right to foreclose.

Under the bills, homeowners also will have a clearly-defined right to access the courts to protect themselves from violations of these protections.

"This legislation finally brings some accountability to the banks for harmful foreclosure practices," Kevin Stein, associate director of the California Reinvestment Coalition, said in a statement Monday.

"Homeowners will now be able to protect themselves from the commonplace violations that banks have exhibited in this foreclosure crisis."

Cristina Trujillo of the California Coalition for Rural Housing agreed.

"We finally have a bill that protects homebuyers in our most vulnerable communities, especially rural communities in California," she said. "Now, everyone has a fair chance at saving their homes and protecting themselves from unfair business practices."

Art Pulaski, executive secretary-treasurer of the California Labor Federation, called the two bills' passage Monday a "clear victory" for homeowners.

"Today, the California legislature stood up to big banks and stood with California homeowners in passing the historic Homeowners' Bill of Rights. While the big banks and their GOP allies fought this much-needed reform tooth and nail, in the end the legislature chose common-sense reform over the banks' special interest power. That's good for California and a positive sign for our democracy," he said in a statement.

"With California still struggling from the devastating impact of the housing crisis, this legislation puts some power and control back into the hands of homeowners."

The attorney general's bill of rights also includes four bills outside of the conference committee process.

The other bills will enhance law enforcement responses to mortgage and foreclosure-related crime, in part by empowering the attorney general to call a grand jury in response to financial crimes spanning multiple jurisdictions.

Additional elements will help communities fight blight related to foreclosure, and the crime that results, and provide enhanced protections for tenants in foreclosed homes.

Harris has said her package builds on the nationwide mortgage settlement, making those reforms permanent and extending them to all Californians -- not just those hurt by the five banks.

In February, federal officials and 49 state attorneys general, including Harris, reached a $25 billion agreement with Wells Fargo and Co., JPMorgan Chase and Co., Citigroup Inc., Ally Financial Inc. and Bank of America Corp. over their alleged improper foreclosure practices.

Of the $25 billion, California claimed the largest portion of the pot -- $18 billion.

From Legal Newsline: Reach Jessica Karmasek by email at

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