California Attorney General Kamala Harris took a big risk in 2011 when she balked at a lowball settlement that the Obama administration and a coalition of state attorneys general had tentatively negotiated with banks and other financial institutions accused of mortgage abuses. Those abuses helped precipitate the financial meltdown of 2008 and the accompanying foreclosure crisis that persists today.

Harris thought that the original deal went too easy on the banks, shielding too many of them from prosecution for shady lending practices. She also reasoned, correctly as it turned out, that the deal – reportedly worth $20 billion – was too modest. It would have netted distressed California homeowners somewhere between $2 billion and $4 billion, a pittance compared to the tens of billions of equity lost by some 2.2 million Californians whose homes had been foreclosed upon or who owed more than their homes were worth.

Within months, Harris was able to broker a better deal with the five major lenders. That settlement raised $26 billion for homeowners nationally. Because of various side agreements, it's estimated California homeowners will get some $18 billion from the deal. Much of the money will help with loan modifications so that people can stay in their homes.

Harris was also able to guide the so-called Homeowners Bill of Rights through the Legislature to the governor's desk. The series of bills extended the protections contained in that federal settlement with five major banks to all but the smallest mortgage lenders in California. Those protections became law on Tuesday.

One of the most significant measures, Senate Bill 900 by San Francisco's Mark Leno, bars dual tracking – the too-common practice of lenders initiating foreclosure procedures or even selling foreclosed homes while simultaneously negotiating loan modifications with borrowers.

A second law, Assembly Bill 278 by then-Assemblyman Mike Eng of Monterey Park, requires "a single point of entry" for homeowners to their lenders. Because of this law, distressed borrowers can no longer be passed on from bank official to bank official endlessly. They must be allowed to deal with one banker or one team of bankers who are familiar with their case. It also bars "robo-signing," the blanket signing of foreclosure documents without first verifying their accuracy.

Since 2007, 1 million Californians have lost their homes through foreclosure. The economy is improving, but as of last August, the attorney general's office estimated that another 700,000 home loans are still in danger of going into default. The deals negotiated by Harris and the federal government will provide seed money to finance loan modifications that can keep the most viable distressed borrowers in their homes. The new rules are designed to make sure that lending practices are sound, so that, in the future, no one is lured into buying a home they can't afford.

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