Bill Introduced to Protect California Widows, Widowers Against Foreclosure
Updated 9/29/16: The Los Angeles Times published an article discussing the signing of CA SB 1150 by Governor Jerry Brown.
Updated 9/1/16: CA SB 1150 has been enrolled and presented to Governor Jerry Brown.
Updated 8/23/16: DS News published an article titled Homeowner Survivor Bill of Rights Approved by Assembly.
Link to article
Updated 6/2/16: National Mortgage News published an article titled California Senate Approves Bill to Expand Rights of Widowed Spouses.
Updated 5/3/16: CA SB 1150 has passed the Senate Judiciary.
Los Angeles Times (Why more widowed homeowners are struggling to prevent a foreclosure)
Updated 4/20/16: HousingWire published an article titled California AG backs expansion of Homeowner’s Bill of Rights.
February 26, 2016
A new bill introduced by state Sen. Mark Leno, D-San Francisco, would provide protections to widows and widowers who want to stay in their home, the senators office said Thursday.
The bill provides protections against foreclosure that are available to other homeowners but not to spouses and children of deceased kin.
Survivors who are not on the loan are not covered by California’s Homeowner Bill of Rights, lenders argue, the senator’s office said.
The HBOR requires survivors have a single point of contact at a mortgage lender and keeps lenders from foreclosing on a home when homeowners are seeking a loan modification.
Survivors have reported that lenders refuse to talk to them or lenders refuse to provide the facts about the loan and foreclosure avoidance options.
“We have an uneven playing field,” Associate Director of the California Reinvestment Coalition Kevin Stein said.
Stein said lenders are asking survivors to speak with their deceased spouse, which is ridiculous.
He said existing protections are not working for survivors. Eighty percent of housing counselors surveyed said they had clients with problems the bill would solve.
But spokesman for the California Mortgage Bankers Association Dustin Hobbs said the bill poses a risk to lenders who would not be able to do necessary underwriting.
“It’s a major risk,” Hobbs said.
If a survivor becomes the borrower and desires to prevent a foreclosure, the lender would be writing a new loan to a new borrower rather than modifying an original loan with the original borrower, Hobbs said.
But Stein said that’s a misreading of the bill. Stein said survivors have no guarantee of getting a new loan or loan modification.
“It guarantees a fair process,” Stein said.
The bill clarifies the lender’s responsibilities, the senator’s office said. Survivors must receive accurate information about assuming the loan and about foreclosure prevention.
The bill gives survivors a single point of contact at a lender and the opportunity to simultaneously apply for loan modification and assumption.
Source: San Jose Mercury News
CA SB 1150 (full text)