Struggling California homeowners may soon have something to cheer about, as a bill seeking to prevent rushed bank foreclosures was passed by State Legislature on Monday. If signed by California governor Jerry Brown in the upcoming months, the bill would prevent “dual-tracking,” meaning banks would not be able to prepare for a foreclosure at the same time that the homeowner is getting an adjustment or modification of their loan. The bill necessitates that bank lenders offer a clear explanation for rejecting a homeowner’s loan, while also requesting that banks verify mortgage documents and provide copies to the borrower, if asked. If the new guidelines are not followed, the new legislation would allow the homeowner to take the matter up in court, while also imposing fines on banks and lenders for disobeying the law. Given the statistics – that 1 million Californians lost their homes to foreclosure between 2008 and 2011, with another 500,000 homeowners currently facing foreclosure – the bill offers a relief to Californians feeling increasing pressure from banks and mortgage companies.
“This will prove to be one of the most important pieces of legislation this body will act on this year or any year,” said Los Angeles Assemblyman Mike Feuer, one of the authors of the bill. “The goal is to provide real, meaningful protections on the precipice of losing their most important asset, while at the same time taking no steps that will impede the recovery of the real estate market.
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