Our Riverside foreclosure defense attorneys wrote earlier this month about a new bill in the California legislature that would make it illegal to foreclose until after the servicer has accepted or declined the homeowner's application for a loan modification. So we were interested to see reports of two other bills introduced in the state legislature that would address other aspects of the housing crisis. As the Associated Press reported March 16, the more controversial bill would require lenders to pay $20,000 for each foreclosure, to help offset foreclosure-related costs to local governments such as police services and lost property tax revenue. The other would address an underlying concern of robo-signing by requiring lenders to record mortgage documents with counties.
The first bill, AB 935, is sponsored by Assemblymember Bob Blumenfield, a Democrat from the San Fernando Valley. It authorizes county recorders to collect $20,000 per foreclosure in fees from lenders. The AP article said the fees would be applied to make up for costs to local governments of foreclosures, and the number likely derives from local government estimates of those costs. It is expected to be controversial. Less well known is AB 1321, which requires banks to record mortgage deeds, trusts and assignments within 30 days of execution. It would also require them to record a mortgage or deed of trust and any assignments 45 days before filing a notice of default. In essence, this requires banks to document their ownership of properties with local governments, possibly stopping confusion caused by banks' sloppy paperwork and missing documents.
As Buena Park foreclosure defense lawyers, we'll be interested to see how these bills do in the legislature. The banking industry is likely to lobby hard against AB 935, but if it sparks a public debate on the costs of foreclosure, that could be worthwhile in itself. The issues addressed by AB 1321 are more subtle for people who aren't following the housing market closely, but we believe they're also important. The robo-signing scandal was essentially about paperwork: banks were caught falsifying documents, and also frequently did things like file the deed with the correct local agency after starting foreclosures. That is, there are widespread and serious questions about who actually owns some properties -- and this bill would force banks to clean up their act, reducing confusion and time in court.
At Howard Law PC, we don't believe borrowers should have to wait for the California legislature to pass a law to be protected from banks' mistakes and overreaching. That's why we aggressively represent borrowers who are negotiating or suing to ensure that their loan modification applications get fair consideration. Our clients come to us after trying for months, even a year, to modify their loans on their own, only to be denied a loan modification against the rules of HAMP or for no reason at all. Our Whittier predatory lending attorneys believe this is a form of predatory lending, and we help clients sue to hold borrowers responsible for their actions. In court, an independent judge can make an informed decision on whether you were treated fairly, a feature that unfortunately has been missing in loan modification programs.
If your home is in default or foreclosure and you don't have much more time to waste on hold with your loan servicer, call Howard Law for help instead. We offer free, confidential case evaluations, and you can reach us through our website or by calling 1-800-872-5925.