Legislature OKs adding bank settlement into CA law


The Legislature heavily debated whether California homeowners should be given more rights when facing foreclosure. There's the argument that something needs to be done to stop the wave.

"We have experienced a titanic of foreclosures that's sinking the economy," said Assm. Mike Eng, D-Alhambra.

Opponents say all this does is open the door to more lawsuits against lenders where attorneys get rich.

"Somebody has to pay off the attorneys. I can't believe we're doing this. This is ridiculous," said Assm. Diane Harkey, R-Dana Point. "Right now, we have 352 days for a foreclosure. That is plenty of time to get your house in order."

The approved Homeowners' Bill of Rights:

  • Bans dual-tracking so that banks can't foreclose on your home while you're pursuing a loan modification.
  • Requires one single point of contact at the mortgage provider.
  • Increases penalties for the much criticized practice of robo-signing, which is automatic approval for foreclosure without reading documents.
  • Lets homeowners sue for significant violations.

Democratic Attorney General Kamala Harris took the lead in both the national mortgage settlement and the effort to put much of it into state law. "What we did today is we gave those families some promise that they can be in a system that allows them a fair opportunity," she said.

The passage of the Homeowners' Bill of Rights gives Luis Viscarra of San Francisco some hope. He has a loan modification now and takes comfort in knowing the bank cannot foreclose on him if Gov. Jerry Brown signs it.

"This bill will be very good because there will at least guidelines. You know, there is nothing," said Viscarra. "The banks make their own laws and we don't have any protection."

The bill now heads to the governor's desk. Brown earlier indicated that he would sign the bill praising the attorney general for consumer protections that are long overdue.

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