NEW BILL--GIVES HOMEOWNERS TOOLS TO AVOID FORECLOSURE!

Lifeline for sinking Homeowners

 

Governor Arnold Schwarzenegger has signed Senate Bill 1137, which was passed by California legislators in late June. The bill seeks to provide new pro­cedures for lenders seeking foreclosure actions and was endorsed by consumer groups.

 

The new law was passed as an “urgency measure,” so most of the provi­sion are effective immediately and continue until January 1, 2013. The legislation has three main sections, which affect borrowers who took mortgage loans from January 1, 2003 through December 31, 2007:

 

· The new law requires a mortgagee, trustee, beneficiary or authorized agent to assess the borrower’s finan­cial situation and explore options for the borrower to avoid foreclosure. The lender must advise the borrower that he or she has the right to request a subsequent meeting within 14 days. A Notice of Default may not be filed until the lender has contacted the borrower or satisfied due diligence requirements to do so, and the NOD must include a specified declaration from the lender detailing either its contact with the borrower or that the borrower has surrendered the prop­erty. The law authorizes borrowers to designate a HUD-certified counseling agency, attorney or other advisor to meet with the mortgagee, beneficiary or authorized agent on the borrower’s be­half.

 

· Fines of up to $1,000 per day may be levied upon owners of foreclosed prop­erties who fail to properly maintain them. A governmental entity seeking to impose fines and penalties must give notice of the claimed violation and an opportunity to correct the violation at least 14 days prior to imposing penal­ties. The law also allows a hearing for those contesting any governmental im­position of fines and penalties.

 

· The law amends current regulations to provide that a 60-day notice to be given to tenants of buildings facing foreclo­sure before the tenant can be removed from a rental housing unit (existing law provided a 30-day notice). A 60-day im­plementation period is in effect on this provision. 

 

“Foreclosures are afflicting thousands of Californians and their communities,” Perata said. “SB 1137 gives homeowners more advanced warning a foreclosure may be coming and provides the tools they need to help avoid it.”.

 

Source: www.sen.ca.gov