Californians need Attorney General Harris' Homeowner Bill of Rights to fix mortgage lending abuses and speed economic recovery. But lobbyists fighting it in Sacramento have now enlisted mortgage bankers from around the country to help them defeat it. (Read the e-mail sent by the Mortgage Action Alliance, the Mortgage Bankers Association's national e-advocacy division.)
The MBA urged members nationwide to "Stop the Damaging Unintended Consequences of Sweeping California Legislation," and oppose common-sense protections of the Homeowner Bill of Rights, a legislative package modeled on the recent settlement between the nation's largest mortgage servicers and 49 state attorneys-general.
Many California homeowners are suffering through a sweeping foreclosure crisis, which is only halfway over, and would benefit immediately from this legislation. On average, more than 500 California families have lost their homes every day since 2007, and there are still more than 30,000 foreclosures completed in the state each quarter. That's almost a ten-fold increase over 2006 levels.
The California Homeowner Bill of Rights, which contains provisions similar to those negotiated with the major banks in the settlement, would fix rampant abuses in loan servicing and reduce foreclosures in three key ways:
- Ensure that homeowners get fair consideration for loan modifications and other foreclosure alternatives before the foreclosure process can proceed;
- Prohibit robo-signing and provide specific recourse when servicers continue to robo-sign in the foreclosure process;
- Provide homeowners with additional transparency, information and protections in the foreclosure process.
The Conference Committee considering the legislation has conducted nearly 20 hours of hearings with industry, homeowners and consumer advocates. The time to protect Californians is now—and we can do it with common-sense rules that banks have already agreed to.