SACRAMENTO, Calif. (7/6/12)--California lawmakers Monday passed a set of foreclosure relief bills that will help hundreds of thousands of state residents facing foreclosures to stay in their homes. The bills could be a template for the rest of the U.S.
Credit unions could be impacted by the legislation, which is the first of its kind in the U.S. The measure would end the practice of "dual tracking," in which a lender goes through foreclosure procedures, even if the homeowner is trying to obtain a modification on the terms of the loan (Houston Chronicle and The Associated Press July 30).
"Credit unions understand that the intention of mortgage reform legislation is to help distressed borrowers who were negatively impacted by a devastating recession," the California Credit Union League said in a prepared statement sent to News Now. "We share the same concern, but we also believe these reforms were proposed to address the practices of other lenders.
"We maintain strict underwriting standards, and are wary of additional burdens that would impede our ability to help struggling Californians emerge from a lingering economic downturn," the league added. "Our primary focus is to continue working with members to keep them in their homes."
The bills reflect and extend protections that came about through a nationwide settlement between 49 state attorneys general and five of the biggest U.S. banks that service mortgages, the newspaper and AP said.
The bills also would require financial institutions to provide a single point of contact for borrowers who want to discuss their loans. Another stipulation mandates that lenders either approve or deny loan-modification requests and provide a clear rationale for the decisions, the paper and AP said.
California Gov. Jerry Brown said he would sign the bills into law.