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As of January 1, 2013, homeowners and borrowers in California will have a slew of new laws protecting them from predatory lenders and unscrupulous mortgage servicer actions. The California Homeowner Bill of Rights was created by state Attorney General Kamala D. Harris as a response to the mortgage crisis and purports to bring fairness and accountability to California’s foreclosure process. Governor Jerry Brown signed the Bill of Rights into law and the changes will help to keep lenders from using abusive tactics against homeowners who are:
  • In default on mortgages
  • Trying to refinance their homes
  • Attempting to obtain loan modifications

California Homeowner Bill of Rights provisions

The new laws provide significant protections for homeowners and include the following major points:

  • Loan modification process stalls foreclosure proceedings: once a homeowner starts negotiating a loan modification, the lender is restricted from continuing the foreclosure process until a modification decision is made. The lender is also required to review the modification application thoroughly.
  • Single point of contact: each homeowner is guaranteed a single point of contact; a person or team within the lending company who has specific knowledge regarding his or her mortgage loan and has authority to obtain decisions regarding his or her file.
  • More information about foreclosure and modification rights: each homeowner must be provided additional information about foreclosure and loan modification proceeding status as well as modification application deadlines.
  • Better remedies against lenders who violate the law: homeowners are allowed more time to file actions against lenders who break the law, and lenders who are found violating the Bill of Rights are subject to penalties, monetary damages, injunctions or lawsuits that can block foreclosures.

California homeowners have suffered at the hands of lenders for many years and the California Homeowner Bill of Rights should help forestall needless and unnecessary foreclosures. However, just having the new laws in place is not enough. Owners should educate themselves about the numerous options that may be available as they seek to keep their homes.

Seek legal assistance

Experienced debt relief lawyers can provide guidance and explain options to those struggling with overwhelming debt. An attorney may be able to help you modify your existing loan by extending the loan term, reducing the principle owed or reducing your interest rate.

You may discover that filing bankruptcy is your best option. A Chapter 7 bankruptcy can liquidate your debts and help you start fresh, on solid financial footing. A Chapter 13 bankruptcy may allow you to reorganize your debts, reducing your payments to a manageable level.

No matter what your situation, legal experts can advise you of your rights and find a solution that is best for your situation. This article is not intended to provide legal advice nor create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney.

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