Pedro Nava (D)
SACRAMENTO, Calif. (Legal Newsline)-Legislation aimed at helping struggling California homebuyers passed a key legislative hurdle Monday amid opposition from banks and mortgage lenders.
The proposal would allow homebuyers who have been served a notice of mortgage default to enlist the help of a state-appointed monitor to negotiate with lenders, with the goal of lowering their monthly payments.
Assembly Bill 1639, which would enact the Mediated Mortgage Workout Program, was introduced by state Assemblyman Pedro Nava of Santa Barbara, a Democratic candidate for attorney general.
"This legislation sends a strong message to the banking and mortgage industry-that business as usual is not working. We will force the industry to do more to help struggling California families facing foreclosure," Nava said. "This legislation will require face to face meetings between homeowners and their lenders -- so that a mutually acceptable plan can be implemented that keeps families in their home."
Assembly Bill 1639 is modeled after mortgage mediation programs in Nevada and Connecticut. The California legislation is sponsored by Los Angeles Mayor Antonio Villaraigosa.
Having cleared the Assembly Banking Committee, formerly led by Nava, the bill will be heard next by the Assembly Judiciary Committee this week.
Among groups officially opposed to the legislation are the California Bankers Association, the California Credit Union League and the Civil Justice Association of California, the state's tort reform lobby.
California had the fourth highest foreclosure rate in the nation during the first quarter of 2010, Irvine, Calif.-based RealtyTrac, which publishes a database of properties, reported last week.
On Thursday, RealtyTrac said that during the first three months of the year there have been 216,263 foreclosure filings, with one in 62 households in default. The firm noted that foreclosure activity in California has decreased 6 percent from the first quarter of 2009.
Nationally, RealtyTrac said foreclosure filings were reported on 932,234 properties, affecting one in every 138 homes the last quarter, marking a 7 percent increase from the previous quarter.
In Nevada, one in every 33 homes was subject to a foreclosure filing. The Silver State had the most foreclosure filings for the quarter, as it has for 13 quarters.
Nevada, which has a foreclosure mediation program, was followed by Arizona, where it was one in every 49, and Florida, one in every 57 properties.
From Legal Newsline: Reach staff reporter Chris Rizo at email@example.com.