Friday, June 29, 2012

The Homeowner Bill of Rights in California and What it Means for Illinois

Foreclosure Prevention Bill Close to Passage

As reported by the LA Times, the Homeowner Bill of Rights, a progressive foreclosure prevention measure, faces its final hurdles next week.  On Wednesday, a two-house special committee agreed to send the bill to the California legislature—on a partisan 4-1 vote.  The state Assembly and Senate received identical transcripts of the bill and are set to vote on the measure Monday, July 2.  The bill would take effect on Jan. 1 if approved; with Democratic majorities in both houses, the expectation for its passage is great.  Gov. Jerry Brown has not indicated whether he would sign the measures, though many have said they don't anticipate a veto.

California Attorney General Kamala D. Harris has largely been the face of the bill.  She called for “urgent efforts” Wednesday in order to aid struggling citizens.  The Homeowner Bill of Rights is a result of months of negotiations between banks, a bipartisan legislature, consumer groups, and the Atty. Gen. herself.  Although many have praised the reforming measure, there has also been much criticism towards the bill.  The California Bankers Association argued against its radical initiatives and stated it “lacked clarity” and definition.  Still, the controversial measure has hope for passing the state’s legislature.

What is the Homeowner Bill of Rights?

The Homeowner Bill of Rights is a collection of proposed laws, striving to aid and protect California homeowners.  The impetus behind the bill is to stem unnecessary foreclosures.   One of the intentions of the measure is end dual-tracking.  Dual-tracking is a common practice whereby lenders continue to pursue foreclosure even though the homeowner is applying for a mortgage modification; this allows for the lender to protect his or her investment, if the homeowner is not granted a new loan.  Under the Homeowner Bill of Rights, servicers would be required to provide homeowners with "a single point of contact.”  Many consumer advocates believe that dual-tracking dispirits homeowners, leading to unanticipated foreclosures.

Furthermore, the bill intends to not only limit some of the powers of the lender, but also strengthen the capabilities of the homeowner.  The measure gives the owner-occupier, first-mortgage holders the prerogative to sue financial institutions; granted, this right is under limited circumstances but still holds lenders accountable of reckless behavior.  Moreover, the bill also requires lenders to record a clear explanation why they deny a borrower a loan modification.  Holistically, the bill hopes to thwart the massive foreclosure rates—which have plagued California since 2007.  Whether it can achieve this goal is another question.

What It Means for River Forest, Oak Park, Chicago, and the State of Illinois?

This bill—being very progressive in its nature—is the first of its kind in the United States.  Many advocates believe that, if approved, the Homeowner Bill of Rights will serve as a template for other states.  Our River Forest foreclosure defense lawyers know that this means, for the next coming months and possibly years, citizens of Illinois may be hearing calls for related reforms.   A similar bill (aptly named “The Homeowner Bill of Rights”) was created in late 2010 in Illinois, but died in the state Senate this past February.  Do not be surprised if you hear appeals for this older, proposed measure—particular if these efforts in California are successful.     

This endeavor in California is one of many attempts across the country to prevent increasing foreclosures rates.   As those of us work on Oak Park and River Forest foreclosure know, these are complicated and convoluted issue.  The Emerson Law Firm aids multitudes of individuals with troubles such as foreclosure.  If you are dealing with foreclosure, please consider giving our firm a call in order to help you traverse this difficult process.   

See Related Blog Posts:

Job Transfer with an Underwater House

Distressed FHA-Backed Loans To Be Sold in New Foreclosure Reduction Plan

(Photo courtesy of ranchocanyon)

1 comment:

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    REO Rockstar