California Forgoes New Foreclosure Law

Inman News
September 2, 2010
Carter, Matt

The California Assembly rejected SB 1275, which the Center for Responsible Lending (CRL) had hailed as "the major foreclosure prevention legislation of the session." State law already forces loan servicers to reach out to struggling homeowners whose mortgages were originated from Jan. 1, 2003, to Dec. 31, 2007, about modifications prior to initiating foreclosures. The bill would have broadened the law to protect all homeowners with mortgages written before Jan. 1, 2009, that are subject to review under the federal Home Affordable Modification Program. "SB 1275 would have implemented modest procedural changes to give all borrowers a fair shot at a loan modification before their home is foreclosed," says Paul Leonard, CRL's California director. "Intense lobbying efforts [prevented lawmakers from putting in place] minimum safeguards that would help avoid unnecessary foreclosures, even though they would benefit both homeowners and loan servicers."
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