The state legislature has finally come up with a way to help homeowners who are facing foreclosure.
On Monday, both the State Assembly and State Senate passed bills, SB900 and AB276, to help level the playing field between homeowners facing foreclosure and banks doing business in California.
Probably one of the most important provisions contained in the new legislation is the prohibition against “dual tracking.” Under this provision, banks will no longer be allowed to continue negotiating loan modifications with homeowners, while at the same time pursing a foreclosure.
Many homeowners who thought they were in the process of coming to a payment agreement with their lender, have had the rug unexpectedly pulled out from under them when they belatedly learned their home had been foreclosed on and sold at auction.
Another important protection in the new law is the doing away of “robo signing,” which is the automatic signing of foreclosure documents by bank employees who in many cases have never read any of the paperwork that they are attesting to have reviewed.
There are several other protections that will give homebuyers more clout when it comes to dealing with banks and other loan servicers.
While it’s likely that there are some homeowners who are gaming the system, the reality is the gaming done by bankers and mortgage holders is what has led to the ongoing crisis in the housing market, and the significant loss in value to most people’s most important asset.
We sincerely hope this new law will prevent future homebuyers from falling into the same housing quicksand, and banks from continuing down the path that got us here in the first place.