New Bill Will Empower Homeowners to Sue Lenders if They Fail to Comply by Regulations

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Julie Parker

Julie Parker was born in March 19, 1983, in Lancaster – Los Angeles County, California. Her father is an experienced economist and businessman, who motivate her taste for the real estate market. Recently, graduated in Economics and now focus her studies in a PhD. Now she’s a consultant and webwritter of ForeclosureListings.com

A new bill is in the offing in California (SB1275) that will not only mandate lenders to refrain from foreclosing while mediation talks are in progress but will give the homeowners the right to sue the lenders if they fail to comply. The Mortgage industry is strongly opposing the bill as the HAMP plan to which it relates to is forever changing and the bill seems to be addressing a moving target. On minor technical points the borrowers would start taking legal action and thus postpone foreclosures in cases where it is inevitable.

Mark Leo, State Senator (Democrat/San Francisco) who has co-sponsored the bill together with Darrell Steinberg (Democrat/Sacramento) who is the Senate President Pro Tem, said the new law was much needed because HAMP did not have any provision to hold the servicers responsible even their actions were improper. He added that although there would be more foreclosures they tried to ensure that preventable foreclosures did not happen again.

Nearly 25% to 30% of the loans do not come under the jurisdiction of HAMP and thus the bill would make broader the borrower’s pool that would be eligible for assistance. The bill is due to get a hearing from the Senate Banking Committee to review the updates that have been introduced when the regulations of HAMP altered. Under rules the bill must go through the Senate floor by next Friday to be still on the field of action.

Recently another bill aiming to prevent foreclosures (AB163) has recently been passed by the Assembly Appropriations Committee. The hearing on floor will take place soon. This bill would “establish a monitored mediation program to help homeowners and lenders reach sustainable loan modifications.” It has been sponsored by Assemblyman Pedro Nava (Democrat/Santa Barbara) together with speaker of the Assembly Emeritus Karen Bass (Democrat/Baldwin Vista).

Information regarding both these bills is available online at www.leginfo.ca.gov.

Jose Vega of Pittsburg had been one of the victims of the lacunae. He had been speaking on the phone with JPMorgan Chase when a realtor knocked to say that on the previous day his house had been foreclosed upon. Vega is hoping that his problem would soon be resolved. To be eligible for the loan he increased his earnings by taking up a part time job as waiter. His original work from real estate dealings had vanished. Lucy, his wife earns something from cleaning houses. They have two children below ten years to care for. After nearly a week of hot haggling Chase withdrew the foreclosure and Vega is still in the house with his family.