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Showing posts with label first-lien. Show all posts
Showing posts with label first-lien. Show all posts

September 17, 2012

A Bill of Rights...For Homeowners?

Hi Folks,
   I hope everyone had a great weekend, and welcome back!

   It had to happen. We knew it was coming. We didn't know how, or when, however, we do know what it is, from whom, and why! It started with our "Bill of Rights" here in the United States a few hundred years back. Fast forward those few hundred years, and we have seen the creation of a different Bill of Rights for Airline Passengers. And on January 1, 2013, the "Homeowner Bill of Rights" takes effect in the state of California.

   The legislation was actually passed in July, however, this "landmark law", as it's been referred to, is making a big splash from coast-to-coast. Emerging from the dust and ashes of the "Robosigning" scandal, as well as the vulnerability of homeowners during the mortgage modification and foreclosure process, this Bill of Rights is actually a "series of bills enacted to protect California homeowners", to which the California Attorney General Kamala Harris said, "will give struggling homeowners a fighting shot to keep their home" (as per a recent story by Barry Paperno on Credit.com).

   In terms of lenders and loan servicers, the Bill of Rights imposes requirements on them, such as prohibiting “dual track” foreclosures (simultaneous foreclosure process and loan modification negotiation with the servicer), guaranteeing a single point of contact from the lender/servicer "for a borrower with a loan modification application pending", writes Paperno. Additionally, banks will need to be much clearer in explaining a rejected loan modification to a borrower, and similarly, allows borrowers to sue lenders for "significant, material violations” of the law, writes Paperno. The Robosigning fiasco was also addressed in the requirement that servicers "document their right to foreclose and imposes fines of $7,500 per loan on fraudulently signed mortgage documents".

   These sound like some great components, however, as Paperno writes, consumer advocate critics of the bill have charged that "only first-lien mortgages for owner-occupants apply", that by first taking effect in 2013, "hundreds of thousands of troubled homeowners won’t benefit from these protections". Additionally, additional criticism included the lack of obligation by servicers to "consider applications for loan modifications or appeals before January 1, 2013."

   "Opposition to the Homeowner Bill of Rights was mounted by the large banks, the California Chamber of Commerce, title companies, real estate agents, trustees and securities industry representatives", writes Paperno.

   There may be some minor drawbacks, and there may be some tweaks needed, however, this looks like a solid piece of legislation in a state that has been pummeled by Foreclosures, and these new laws could have been quite helpful all along. Will they start sprouting up in other State Legislatures? I certainly believe so, but help is needed now in states such as Arizona, Nevada, Florida, and many more. How soon do you think these and the other states will see light at the end of the tunnel?

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Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
Rent to Own Homes and Real Estate Blog for HomeRun Homes: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com


TAGS: #Homeowners #BillofRights #California #Robosigning #mortgagemodification #foreclosureprocess #loanservicer #lender #borrower #firstlien