Navigating Mortgage Struggles in California: How the Homeowner Bill of Rights Can Protect You

Living in California comes at a cost and, chances are, you or someone you know is struggling to make their mortgage payments. During the height of the foreclosure crisis, more than one million borrowers in California lost their homes, prompting lawmakers to take action. On January 1, 2013, a set of laws known as the California Homeowner Bill of Rights went into effect. If you live in your home and it has no more than four units, the Homeowner Bill of Rights is here to help you. Great! But what does that mean? Here’s a breakdown of the biggest protections:

Pre-Notice of Default Contact. Your mortgage servicer is required to contact you at least 30 days before recording a Notice of Default. They have to assess your financial situation and provide you with information about the opportunities that may be available to you to avoid foreclosure, such as being reviewed for a loan modification or a short sale.

Tip: Take advantage at this early stage to consider your options and determine what’s best for you and your family. Assess whether you can really afford to stay in your home.

Ban on Dual-Tracking. Mortgage services are not allowed to proceed with the foreclosure process, which means recording a Notice of Default, recording a Notice of Trustee’s Sale, or conducting a foreclosure sale, while your complete loan modification application is under review. Now here’s the thing: the law says your application is complete when the service has everything it needs for the review and the servicer decides when it’s complete. If your servicer has asked you for additional documents, your application is not complete. Once your application has been reviewed, your servicer is required to let you know in writing if you’ve been approved, and to wait at least 30 days to allow you to appeal the decision if you’ve been denied.

Tip: When speaking with your servicer, always make a note of with whom you spoke and what they said on what date. Be sure to ask, “Is my application complete?” and “Do you need any additional documents at this time?” Always read mail from your servicer and keep copies of all paperwork sent and received.

Single Point of Contact. If you are pursuing a foreclosure avoidance option, your servicer is required to assign you a “single point of contact” who should be knowledgeable about your file, able to coordinate your document submissions, and have access to decision-makers able to stop a foreclosure sale.

Tip: Request a single point of contact. Some courts are undecided on whether you have to make the request, so just ask.

Be Proactive and Remember that You Do Have Options

Note: This is not meant to be an exhaustive explanation of the Homeowner Bill of Rights and the law varies for small servicers that conduct less than 175 foreclosures per year. If you are facing a foreclosure, you should consult with an attorney.

The laws and cases protecting Homeowners are changing every day, and often for the better. Please give us a call at (855) 219-3333 if you are having any type of Real Estate Issue.

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