Mortgage & Foreclosure Protections for Homeowners Win Senate Approval

May 10, 2018

SACRAMENTO – Sen. Jim Beall’s legislation to restore crucial mortgage and foreclosure protections that expired at the start of this year was passed today by the Senate and now moves to the Assembly.

Senate Bill 818 proposes to renew key consumer safeguards in the California Homeowner’s Bill of Rights, protections that were adopted in the aftermath of the 2008 recession that contributed to 800,000 homes entering foreclosure. The bill gave borrowers immediate help and protection in the event of inaction by their lenders.

“Continuing the Homeowner’s Bill of Rights will give homeowners a fair opportunity to keep their homes,’’ Beall said. “These are common-sense consumer protections that have been the status quo since 2012. Lenders and loan servicers have worked under the Homeowner’s Bill of Rights for years and they’ve continued to make profits, proof that restoring the regulations will not pose a burden to them.’’

Senate Bill 818 proposes to renew key consumer safeguards in the California Homeowner’s Bill of Rights, protections that were adopted in the aftermath of the 2008 recession that contributed to 800,000 homes entering foreclosure. The bill gave borrowers immediate help and protection in the event of inaction by their lenders.

On Jan. 1, key provisions of the Homeowner’s Bill of Rights lapsed. In response, Beall, chairman of Transportation and Housing Committee, introduced SB 818 to restore the safety measures that had expired, including:

  • Protections against dual tracking to prevent from continuing foreclosure while simultaneously entering loan modification negotiations with borrowers.
  • The right to appeal the denial of a loan modification.
  • Requirements that loan servicers send formal written notifications regarding loan modification applications, whether any application documents were missing, and whether the application was denied.
  • Allowing borrowers sufficient time to appeal a questionable denial.

Beall also pointed out reviving the Homeowner’s Bill of Rights would come at a critical time for homeowners who were hit by devastating fires in Napa and Southern California and are at risk of defaulting on their mortgages.

“We must be proactive and make sure vulnerable homeowners have protections in place when they need them,’’ Beall said. “SB 818 ensures Californians will be treated fairly and given a realistic chance to save their homes.’’