Tuesday, July 17, 2012

CA "Homeowners Bill Of Rights" Becomes Law

On July 10, 2012 Gov. Brown signed the California Homeowner Bill of Rights into law. The Bill offers protection from the flawed and abusive practices of the big banks.  Governor Brown passed this bill because after thorough investigation it was revealed that bankers working in one department would feign ignorance of a customer’s case while another department would go behind the customer’s back and foreclose on them.  Customers were even being foreclosed on while in the process of a loan modification.  Homeowners will also be allowed to sue for violations such as dual-tracking and penalties for the banks have been increased.  Banks will also be forced to offer one contact per person.  “While the provisions that would make dual-tracking illegal and make the process less bureaucratic are positive” (Homeowners Could Sue Lenders Under New Bill of Rights), many feel the laws need to go further.
There are concerns raised by this bill though. “The California Bankers Association is concerned about the potential spike in litigation that may raise costs for future home buyers” (Gov. Brown signs Homeowner Bill of Rights).
            There are also many other benefits gained by homeowners with the passage of this bill.  One significant right given by this bill is the right to security against foreclosure.  The Homeowner Bill of Rights makes it much harder for the person in debt to be foreclosed on and keeps minor debts from being the cause of it. Homeowners have also gained the right to know all of the rules and charges on the property before buying a home.  Documents have to be provided in plain English, but unfortunately most real estate legal documents are still as confusing as ever due to use of unnecessary complex language.  The interests of the individual are stressed above that of the community as well.  Living in a common interest community does not mean a person’s individual autonomous rights such as peaceful advocacy in common areas need to be given up.   
          This law will generally come into effect on January 1. 2013. It only pertains to first mortgages secured by owner-occupied properties (principal residence).