California Senate Bill 1275 is Great for Distressed Owners of San Diego Real Estate
Jun 8th, 2010 by Kathleen Behrens
Houses for Sale in San Diego – More help may be on the way for distressed San Diego homeowners who are at risk of losing their San Diego homes to foreclosure. On June 3, 2010, the Senate Banking Committee passed California Senate Bill 1275 (SB 1275) to help protect California homeowners by preventing unnecessary foreclosures. SB 1275 would institute new mandatory procedures servicers would be required to follow before initiating the foreclosure process. Reducing the number of foreclosures will enhance the stability and value of San Diego real estate.
Under SB 1275, home loan servicers would be obligated to take four actions before filing a Notice of Default, which is the first step in the foreclosure process. First, a notice would be sent to homeowners to inform them of their rights regarding the foreclosure process and possible alternatives to foreclosure. Second, an application for a loan modification or other foreclosure alternatives would be mailed to homeowners. The third step would require mortgage servicers to evaluate borrowers who submit requests for loan modifications or foreclosure alternatives to determine if they qualify. The fourth requirement would mandate servicers to mail denial letters to borrowers who do not qualify to explain why they were denied.
Servicers would be held accountable by being required to attach a new document referred to as a Declaration of Compliance to the Notice of Default to document the steps in the procedure had been properly followed. Servicers would be prohibited from proceeding with the foreclosure process while an application for a loan modification is pending or a homeowner is making payments under a trial loan modification period.
Homeowners would also benefit from a new provision in which servicers would be held accountable for their errors. Currently homeowners have no recourse if their homes are mistakenly sold as foreclosures. Under SB 1275, homeowners would be entitled to a private right of action to seek damages due to servicer errors and could possibly reverse foreclosure sales that should not have happened.
Too many preventable San Diego foreclosures have occurred due to servicers who have not fully, or in some cases even partially, cooperated with distressed San Diego homeowners who could benefit from loan modifications and other foreclosure alternatives to avoid losing their San Diego homes. It is unfortunate that servicers have demonstrated such as unwillingness to help struggling homeowners. SB 1275 will benefit homeowners by protecting their rights and specifying the procedures mortgage servicers must follow to actually provide services to their clients who are at risk of losing their homes to foreclosure. The passage of SB 1275 would be great because it requires mortgage servicers to cooperate. SB 1275 advances next to the Assembly Banking Committee.
If you are at risk of losing your San Diego home to foreclosure, contact your lender to find out what your rights are and how you can apply for a loan modification or other foreclosure alternatives. If you decide, you would prefer to do a short sale for your San Diego home, contact San Diego Broker and Realtor Russ Petrone of Petrone Properties Real Estate Associates at 858-259-1000. With 25 years of experience in San Diego real estate, Russ has the knowledge, experience, and negotiating skills to help you sell your San Diego home for the highest value in the shortest amount of time possible.