Recently a legislative conference committee voted to approve a bill draft that seeks to reform the mortgage foreclosure process. California Association of REALTORS (C.A.R.) is opposing this conference report.
According to C.A.R., the measure, sponsored by the state Attorney General, will stall the housing recovery by inviting bad-faith lawsuits and defaults, and make it difficult for even well-qualified borrowers to obtain financing.
Initially, the Attorney General had sponsored a package of bills called the Homeowners Bill of Rights.
For procedural reasons, the majority of these bills have been under consideration by a Conference Committee made up of six legislators.
REALTORS had the opportunity to educate these legislators about C.A.R.”s concerns as part of Legislative Day that occurred in May and attended by many Lake County REALTORS. Since then, C.A.R. has been working directly with the conferees and legislative staff to make them aware of the unintended consequences of some of these
proposals.
The Conference Committee has now issued its final report, and it must be passed by both Houses of the legislature.
According to C.A.R., one provision allows any borrower, no matter what the circumstances, to file a lawsuit to stop a foreclosure.
The language is written so vaguely that the borrower doesn”t even have to show that they have been personally harmed to file suit and be awarded damages.
And even if a court allows a foreclosure to proceed, one-sided attorneys” fees may still be awarded based on the very broad definition of a “prevailing party” in the report.
And, of course, if lenders don”t have the remedy of foreclosure to recover their security in appropriate situations, they will be less likely to lend, credit will be less available, and the bill will delay the housing market recovery even more.
The Lake County Association of REALTORS and C.A.R. encourage you to call your local representatives to voice your opinion on this matter.
Ray Perry
Kelseyville
