1. California’s “Homeowner Bill of Rights” Signed Into Law

    Lenders doing business in California will need to begin revising their foreclosure policies and procedures thanks to new legislation. 

    Earlier this month, Governor Jerry Brown signed into law two bills that make up the state’s “Homeowner Bill of Rights.” Law firm Buckley Sandler:

    “Effective January 1, 2013, the two substantively identical bills will (i) codify a number of protections similar to those contained in the Multistate Servicer Settlement between 49 state attorneys general, the Federal Government, and the nation’s five largest mortgage servicers announced in February, (ii) amend the mechanics of California’s foreclosure processes, and (iii) provide borrowers with new private rights of action.” (Key Parts of California “Homeowner Bill of Rights” Signed Into Law) 

    For your reference, three key takeaways:

    1. Foreclosures will take longer to complete:

    “By adding significant new procedures to the non-judicial foreclosure process, the legislation will only further delay non-judicial foreclosures in California, which took about a 1 year on average in 2011.” (California Is Poised to Enact Foreclosure Legislation by Morrison & Foerster LLP) 

    2. Noncompliance can be costly:

    “Borrowers will be permitted to seek injunctions against foreclosures until violations of the statute are corrected and the statute permits the greater of treble damages or $50,000 in statutory damages if a violation of certain provisions of the statute is found to be intentional or reckless or resulted from willful misconduct.” (California’s Residential Foreclosure Overhaul Signed Into Law by Ballard Spahr LLP) 

    3. “Robo-signing” lenders will be fined:

    “… the legislation … imposes civil penalties (up to $7,500) for the repeated filing of foreclosure documents without properly reviewing the foreclosure documents and verifying their accuracy—a process commonly known as ‘robo-signing.’” (California Takes Significant Steps to Restrict Lender Rights by Enacting California Homeowner Bill of Rights by Snell & Wilmer L.L.P.) 

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    See also: California County Considers Using Eminent Domain to Seize Underwater Mortgages - Dechert LLP 

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