 SB 1137, introduced by Senator Don Perata (D-Oakland), is the primary California State foreclosure bill moving through the California legislature.
UTA’s California lobbyist Mike Belote, recently discussed the bill
in the UTA eNews and now reports that the bill is gaining major momentum. On April 2nd, the bill was heard in the Senate Banking Committee. The California Mortgage Bankers Association, California Bankers Association, Community Bankers Association, Wells Fargo, California Financial Services Association, and others all announced that they are now neutral on the bill. On April 4th, UTA met with Senator Perata's staff to go through a lengthy series of more technical points raised in order to make the bill workable. The primary points involve properly aligning the roles of trustees and lenders in the new requirements imposed by the bill. But the bill is likely to pass, Belote reports.
According to Senator Perata’s press releases, SB 1137:
“... is similar to its predecessor but does not include a provision contained in SB 926 that would have required consumers to be notified of pending changes in monthly mortgage premiums. That requirement proved problematic, Perata said, because rates are fluctuating so quickly that the information might not be accurate by the time the change in payment actually occurs.
Also, SB 1137 allows lenders to talk with a borrower by phone instead of being required to meet with the borrower in person. That is one of the changes Perata has made after working closely with financial institutions to ensure the measure is workable."
SB 1137 would also require:
- Lenders to contact borrowers in person or by phone, before filing a notice of default, to discuss possible workouts. The lender must provide the borrower a list of HUD certified credit counselors available to assist the borrower.
- Providing tenants with a written notice in six different languages, once a notice of sale has been posted on a property.
- Notifying residential tenants 60 days in advance of any eviction created by a foreclosure, instead of the current 30 days.
- Financial institutions to maintain properties they have taken over by foreclosure or face a $1,000 per day fine. “Failure to maintain” includes permitting excessive foliage growth that diminishes the value of surrounding properties, allowing trespassers or squatters, or permitting mosquito larva to grow in standing water.”
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