Five years after a tidal wave of foreclosures swept California, government is still tossing life preservers to struggling homeowners.
The "homeowner bill of rights," which took effect Jan. 1, is the latest to arrive amid fanfare from the politicians and consumer advocates who championed it.
The state legislative package codifies some of the changes agreed to in last year's $25 billion national mortgage settlement, negotiated between federal and state attorneys general and five major lenders, including Bank of America, Wells Fargo and Chase.
The bills' changes apply to all lenders in California not just the big banks and extend the protections beyond the settlement's 2015 end date.
"Too many Californians have lost their homes despite doing all they can to avoid foreclosure," said Norma Garcia, an attorney with Consumers Union in San Francisco.
The group, which publishes Consumer Reports magazine, estimates more than 900,000 foreclosures occurred in California from 2007 to 2011 during the recession and housing collapse.
In Sacramento County, about 60,000 homes have been foreclosed on in the past five years. The peak came in 2008, with about 19,000 foreclosures, and tapered off last year to about 4,000, as lenders pursued alternative resolutions and the housing market began to improve.
The new law will help those still struggling, Garcia said.
The homeowner bill of rights enacts changes meant to correct misdeeds that came to light during the foreclosure crisis.
Among them are so-called robo-signing, where banks signed off on foreclosures without ensuring they were warranted, and dual tracking, in which lenders proceeded with foreclosures while at the same time processing borrowers' applications for loan modifications. Many homeowners complained that they thought they were successfully modifying their loan only to discover they would still lose their home.
The bills that emerged from the Senate and Assembly also seek to curtail the maddening runaround that homeowners got as they were shuffled to lender call centers from India to Indianapolis.
"For too long, struggling homeowners in California have been denied fairness and transparency when dealing with their lending institutions," state Attorney General Kamala Harris said in a statement on the laws' implementation.
"These laws give homeowners new rights as they work through the foreclosure process and will give Californians a fair opportunity to stay in their homes."
Homeowner Bill of Rights
Forbids dual tracking
Restricts the practice of dual tracking, in which banks proceed with foreclosure even though a borrower has applied for a loan modification. Under the new law, banks must give a clear answer on complete applications before moving ahead with foreclosure.
Ensures single point of contact
Requires large banks to give struggling homeowners a single point of contact - either an individual or a team of people, all of whom can help.
Mandates that foreclosure filings, such as notices of default and notices of trustee sales, must be complete and accurate and supported by reliable evidence.
Provides legal remedies for borrowers
Homeowners can bring legal actions for violations of the law's provisions. They can sue to stop foreclosure or, if a home was already sold, they can seek monetary damages.
Protects tenants from quick evictions
Tenants in foreclosed rental homes can't be evicted without 90-day notice from the new owner. If the tenant has a lease, the owner must honor that lease unless it's proved to be fraudulent.
For more information, go to the California attorney general's website at oag.ca.gov/hbor, or see the Consumers Union fact sheet at www.consumersunion.org/pdf/CA_Homeowner_Bill_of_Rights_Summary.pdf