New consumer protections for California homeowners are effective Jan. 1 2013.
The California Homeowner Bill of Rights (CHBR), extends key mortgage and foreclosure protections to California homeowners and borrowers.
New laws restrict dual-track foreclosures, guarantee struggling homeowners a reliable point of contact at their lender and impose civil penalties on fraudulently signed mortgage documents. Homeowners may require loan servicers to document their right to foreclose.
There are also provisions for renters that force landlord owners to disclose foreclosure status to potential renters and to give tenants 90 days notice before starting eviction proceedings.
“For too long, struggling homeowners in California have been denied fairness and transparency when dealing with their lending institutions,” said Attorney General Kamala D. Harris.
“These laws give homeowners new rights as they work through the foreclosure process and will give Californians a fair opportunity to stay in their homes,” she said.
Governor Jerry Brown signed the California Homeowner Bill of Rights into law to bring fairness, accountability and transparency to the state’s foreclosure process.
With the new CHBR rules:
• There is a restriction on dual-track foreclosures, where a lender forecloses on a borrower despite being in discussions over a loan modification to save the home.
• Struggling homeowners are guaranteed lenders will provide them a single point of contact with knowledge of their loan and direct access to the banks’ decision makers.
• The statute of limitations to prosecute mortgage-related crimes is extended from one to three years, allowing the Attorney General’s office to investigate and prosecute complex mortgage fraud crimes.
• The Attorney General’s office can use statewide grand juries to investigate and indict the perpetrators of financial crimes involving victims in multiple counties.
• For tenants who have a fixed-term lease of one year or less, the new owner must honor the lease unless the owner can prove the lease is fraudulent.
Local governments have additional tools to fight blight caused by multiple vacant homes in their neighborhoods.
Read more details about the California Homeowner Bills of Rights.