There was a story over at HousingWire recently detailing the handful of foreclosure prevention bills being considered in California. Here are some highlights from that piece:
A number of foreclosure mediation bills introduced in California in recent months await consideration and votes by the State legislature. …
Assembly Bill (AB) 1588, introduced in September 2009, would add to foreclosure legislation already passed in the State by establishing the Monitored Mortgage Workout (MMW) Program. The Program would be administered by the California Housing Finance Agency, and would give borrowers an opportunity to explore foreclosure alternatives. The bill would prohibit further foreclosure action until the borrower completes participation in the Program.
It’s similar to AB 1639, last amended in March 2010, that establishes the Mediated Mortgage Workout (MMW) Program to help borrowers and lenders develop a modification plan. A Governor-appointed and State Senate-confirmed administrator would lead the program, which would require participating borrowers to deposit half the current mortgage payment each month to the Program administrator. The bill would also prohibit lenders and servicers from reporting a negative credit event if the borrower completes the MMW Program and accepts a mortgage modification.
Additionally, SB 931, introduced on February 2, prohibits a deficiency judgment on a note secured by a first lien when the borrower sells the house for less than the remaining mortgage due, as long as the first lien holder gives prior written consent. The lien holder can then accept all proceeds from the sale as full payment of the debt, and discharge the remaining debt.
AB 2024, introduced Feb. 17, would require lenders to notify borrowers of specific reasons a loan modification request is rejected.
SB 1221, introduced Feb. 18, would amend existing timelines for a lender to file a notice of sale. The bill would require lenders to send the notice of sale no less than 85 — instead of the current three months — days after filing the notice of default.
SB 1427, introduced Feb. 19, would require a notice of default to identify the contact information and name of any person or entity designated to maintain the property in foreclosure.
AB 2325, introduced the same day, expands the scope of parties considered as “foreclosure consultants.” The bill would qualify as a foreclosure consultant anyone arranging or attempting to arrange an audit of an obligation secured by a lien on a residence in foreclosure. Therefore, anyone arranging or attempting to arrange such an audit would first be required to register with the Department of Justice and become certified to do business as a foreclosure consultant.
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