LOS ANGELES (7/13/12)--California Gov. Jerry Brown Wednesday signed the "Homeowner Bill of Rights" into law in Los Angeles. The bill will go into effect Jan. 1. Credit unions will be impacted by the legislation, which is the first of its kind in the U.S.
Proponents say it will protect homeowners who are involved in loan modification and foreclosure processes (Pasadena Star-News July 12). The major provisions of the bill seek to alleviate common problems people encounter when trying to retain their homes.
The bill prohibits "dual tracking" foreclosures, in which one bank department says it will help a struggling homeowner while another proceeds with the foreclosure process. It also requires that all loan documents must be verified, and asks lenders to provide a single point of contact for borrowers who want to discuss their loans and to keep them informed, the newspaper said.
"Credit unions understand that the intention of mortgage reform legislation is to help distressed borrowers who were negatively impacted by a devastating recession," the California Credit Union League said in a statement sent to News Now last week (July 6). "We share the same concern, but we also believe these reforms were proposed to address the practices of other lenders.
"We maintain strict underwriting standards, and are wary of additional burdens that would impede our ability to help struggling Californians emerge from a lingering economic downturn," the league added. "Our primary focus is to continue working with members to keep them in their homes."