Thursday, July 12, 2012

New California Foreclosure Law Signed

Well, it's official. California has signed a bill that will definitely not allow dual tracking. Attempting to do a loan mod and Lo & Behold, you get foreclosed on? Can't happen with this new law.

When the measures go into effect next year, California will be the first state to prohibit lenders from "dual tracking," the practice of negotiating with clients to modify a mortgage so that payments become more affordable while simultaneously pursuing foreclosure. In such cases, homeowners can wind up being evicted even though they had been working with the bank to modify their loans.

The new laws also ban so-called robo-signing, the improper or faulty processing of foreclosure documents, and would allow state agencies and private citizens to sue financial institutions, under limited conditions, for economic compensation and for additional civil damages of up to $50,000 if lenders willfully, intentionally or recklessly violate the law. No lawsuit could go forward if the bank or servicer first fixes the problem with documentation or procedures, according to the bills.

Here's to hoping this eliminates the problem rather than creating new ways to sue banks!

No comments: