Tougher California Wrongful Foreclosure Laws Eyed by Law Makers

California legislators are working to better protect California homeowners from wrongful foreclosures.  In its 2010 legislative session, Golden State law makers are considering SB 1275, the "Homeowners Bill of Rights," which would create stricter consequences for bank, mortgage lenders and loan servicers who try to foreclose on homeowners either while a HAMP loan modification is pending or without first offering homeowners a chance to qualify for a loan modification.   

The bill, which was passed favorably by the Senate Banking, Finance and Insurance Committee would require mortgage lenders to complete an evaluation of a homeowner's eligibility for both a HAMP loan modification or any other loan modification program before it is permitted to begin foreclosure proceedings.  Banks must also provide a detailed explanation letter if a homeowner is denied a modification.  

Violations of the new law, if passed, would allow California homeowners to void the foreclosure or recover triple damages for property damages or $10,000, whichever is greater.  

The bill has not been passed into law.  California homeowners who might be in the midst of a loan modification or who have been denied a modification, should contact their local state representative and urge their support of SB 1275.  As the number of foreclosures increase in California and the number of loan modification denials continue to rise, more and more California residents are at risk of losing their homes.

If you have questions about wrongful foreclosures or about California wrongful home seizures and lockouts, contact the attorneys at Phillips & Garcia. We want to hear your story.