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The California Homeowners Bill of Rights

April 20, 2012 Leave a comment

California Attorney General Kamala Harris has been working since earlier this year on a package of bills to help protect homeowners from foreclosure and wrongful foreclosure practices by banks.

The so-called California Homeowners Bill of Rights was to be put to vote by the California Assembly’s Senate Banking and Finance Committee on Monday. However, Chairman Mike Eng (D-Monterey Park) of the Assembly Banking and Finance Committee asked that debate be postponed for a week in an effort to amend the bills so a compromise could be reached during negotiations with consumer groups and mortgage bankers.

In a press release issued by the Office of the Attorney General, the provisions of the bills were outlined and were aimed at making sure that homeowners are not put on a so-called dual-track process that allows banks to continue a foreclosure process at the same time they are negotiating possible loan modifications.

According to the Huffington Post,

“Other provisions in the bundle require banks to provide homeowners with a single point of contact during the loan modification process and levy a $25 fee on banks every time they register a default. Proceeds from the default fee would then go into a pool of money funding mortgage fraud investigations.”

While some of the provisions outlined in the proposed Bill of Rights overlap with the national mortgage settlement, the settlement expires in three years and Harris wants the rules to extend into perpetuity.

Harris has support from many political leaders on the proposed Bill of Rights, including San Francisco Mayor Ed Lee, as well as dozens of consumer, fair-lending and economic justice organizations, but faces opposition by mortgage bankers, bankers, credit unions and the financial industry.

AG Harris Proposes California Homeowner Bill of Rights

Atty. Gen. Kamala D. Harris is proposing a California Homeowner Bill of Rights which, she says, is aimed at fixing some of the most serious flaws in the system.

The proposed legislation would, if approved, stop banks from pursuing foreclosures against troubled borrowers they negotiate loan modifications. The proposed bill would also ensure that borrowers work with a single point of contact at the banks instead of being passed from one department to another as traditionally the case.

The Los Angeles Times reports on Harris’s statement regarding the legislation:

“California communities and families are being devastated by the mortgage and foreclosure crisis. We must ensure the deceptive practices that caused it never happen again,” Harris said. “The California Homeowner Bill of Rights will provide basic fairness and transparency for homeowners, and improve the mortgage process for everyone.”

In addition, the proposed bill would also give local governments tools to force banks and property owners to maintain blighted, foreclosed homes and to give new owners incentives to improve their properties; allow renters more time to stay in foreclosed residences; collect fees from banks to pay for enhanced law enforcement actions to defend homeowners and create a statewide grand jury to investigate alleged financial and real estate foreclosure crimes.

The new legislation now sits before the state Senate and Assembly for approval.

Harris Holds Out For Tougher Terms

January 30, 2012 1 comment

California Attorney General Kamala Harris is seeking tougher terms in the multi-state proposed agreement with banks over foreclosure practices.

The proposed deal, announced last week, is expected to range from $17 billion to more than $30 billion, depending on how many state attorneys general sign on to it and how many servicers take part in it. If California supports the deal covering the five biggest servicers, a settlement is likely to hit $25 billion but Harris is pushing for a broader probe of banks’ mortgage practices, including securitization of the loans.

According to Bloomberg, some analysts say that this move may be an effort to strengthen her political standing as a rising star in the Democratic Party. By holding out she can put her mark on the issue but it can be at the risk deepening the “blight and despair” for many of the 2.2 million distressed California homeowners needing assistance now who can’t afford to wait for a political gamble.

Bloomberg reports:

“A person involved in California’s negotiations confirmed the origination of mortgages is a sticking point in the deal, along with other releases of liability for violations of state “false claim” laws, and securitization, or the packaging of mortgages into bonds sold to investors.

The most recently drafted terms of the deal offer the banks such releases in exchange for a refinancing program for people who are still in their homes and current on their mortgage payments, the person said. It ignores victims of the most egregious origination fraud who were the first to lose their homes to foreclosure, the person said.”

Nationwide Draft Settlement Does Little for Homeowners

January 23, 2012 2 comments

According to the Associated Press, a $25 billion draft settlement between the nation’s major banks and U.S. states over deceptive foreclosure practices has been sent to states for review.

Negotiations between banks and state attorneys general have been dragging on for more than a year over the fraudulent foreclosure practices that drove millions of Americans from their homes during the housing crisis.

While those who lost their homes to foreclosure are unlikely to get their homes back or benefit much financially from thesettlement, it could reshape long-standing mortgage lending guidelines and make it easier for those at risk of foreclosure to restructure their loans.

According to the AP:

The settlement would only apply to privately held mortgages issued between 2008 and 2011, not those held by government-controlled Fannie Mae or Freddie Mac. Fannie and Freddie own about half of all U.S. mortgages, roughly about 31 million U.S. home loans.

As part of the deal, about 1 million homeowners could also get the principal amount of their mortgages written down by an average of $20,000. One in four homeowners with a mortgage — or roughly 11 million people — owe more than their home is worth.

Under the deal:

— $17 billion would go toward reducing the principal that struggling homeowners owe on their mortgages.

— $5 billion would be placed in a reserve account for various state and federal programs; a portion of that money would cover the $1,800 checks sent to those homeowners affected by the deceptive practices.

— About $3 billion would to help homeowners refinance at 5.25 percent.

State attorneys general are meeting today to discuss the deal. But some states have disagreed over what terms to offer the banks, including California Attorney General Kamala Harris who announced she would not agree to a settlement that would allow too few California homeowners to stay in their homes and let the banks off easy for their wrongdoings.

AG Kamala Harris strikes again!

December 28, 2011 Leave a comment

California Attorney General Kamala Harris filed lawsuits against Fannie Mae and Freddie Mac on Tuesday. The lawsuits demand that the companies that own some 60 percent of the state’s mortgages respond to questions in a state investigation, according to the Huffington Post.

While an attorney representing the Federal Housing Finance Agency said state attorneys general do not have the authority to issue subpoenas against the federal conservator, Harris argues that since the mortgage companies own properties in California, they are subject to state law and demands.

Attorney General Harris is investigating Freddie Mac’s and Fannie Mae’s involvement in 12,000 foreclosed properties in California where they served as landlords. She also wants to find out what role the companies played in selling or marketing mortgage-backed securities.

The lawsuits ask the mortgage firms to respond to 51 investigative subpoenas that call on Fannie Mae and Freddie Mac to identify all the California homes on which they foreclosed. The lawsuits also ask the mortgage firms to reveal whether they have information on the decreased value of those homes due to drug dealing or prostitution, as well as explosives and weapons found on those vacant properties.

Scam Alert: New Arrests in Stockton Foreclosure Scam

December 21, 2011 Leave a comment

Earlier this month, Attorney General Kamala D. Harris announced the arrests of three top officers of a Stockton real estate company who took thousands of dollars in up-front loan modification fees and made false promises to lower the mortgage payments of struggling Central Valley homeowners.

Magdalena Salas, 42, Angelina Mireles, 42, and Julissa Garcia, 36, of Stockton, were arrested on 13 felony and two misdemeanor counts, including conspiracy, grand theft and false advertising.

“These scam artists preyed on innocent homeowners who were simply trying to protect their homes and families from foreclosure,” Attorney General Harris said. “The mortgage crisis has caused tremendous damage to our state and to California families. There is nothing worse than those who seek to capitalize on this devastation by defrauding Californians who have already been victimized in this crisis.”

Attorney General Harris formed a Mortgage Fraud Strike Force in May 2011 to investigate and prosecute mortgage fraud.

Scam Alert: California AG Charges Two with Loan Modification Scam

December 15, 2011 Leave a comment

mortgage scam alertAccording to a press release from California Attorney General Kamala Harris‘ office, two owners of a Southern California-based loan modification company were arrested last Tuesday on charges that they scammed thousands of distressed homeowners across the country out of more than $6 million,

Huffington Post reports that Christopher Fox and Curtis Melone, both 37, were accused of illegally charging struggling homeowners $3,500 each in exchange for assistance in securing loan modifications that the attorney general says were never performed.

Fox and Melone allegedly collected fees from customers before performing services, despite California law prohibiting foreclosure assistance firms from taking money until the related services have been performed. In addition, their company, Green Credit Solutions (also known as Guardian Credit Services and Get My Credit Grade) allegedly stated that loan modification services would be performed by lawyers, when its only staff attorney was a disbarred Tennessee lawyer who claimed to have partners at “Smith Harris PLLC,” an already defunct law firm.

“Homeowners continue to struggle throughout California and across the country to hang onto their homes, and this prosecution is another warning to predators who would seek to profit from their distress: this kind of criminal conduct will meet with swift and certain consequences,” said Harris in a statement.

If you are seeking assistance with a loan modification, we advise you to check the California State Bar website to verify an attorney’s license and ensure you are working with a credentialed attorney.