State Senate Banking Committee to vote on bill tomorrow
SAN FRANCISCO, April 26, 2011 /PRNewswire-USNewswire/ -- Tomorrow, the California State Senate Banking & Financial Institutions Committee will vote on SB729, the California Homeowner Protection Act. Introduced by Senator Mark Leno and Senator Darrell Steinberg, SB729 would require loan servicers to give struggling borrowers who apply for a loan modification a yes or no answer before starting the formal foreclosure process.
SB729 would end the "dual track" problem—where homeowners lose their homes to foreclosure while they are negotiating a loan modification with their lender. It also allows homeowners to bring legal action against servicers when serious violations occur.
As the state Senate Banking Committee considers this bill, the California Reinvestment Coalition's recent survey of thirty-two nonprofit counseling agencies in California reveals that the dual track problem is worse than ever. In the survey, conducted just two weeks ago, 97% of housing counselors reported that the foreclosure process "often" or "sometimes" continued while loan modifications were being negotiated with the servicer. To make matters worse, 93% of housing counselors reported that borrower's homes were "often" or "sometimes" sold by the bank despite ongoing negotiations with the lender.
"Despite all of the attention being paid to the dual track problem, banks are not changing their practices," said Kevin Stein of the California Reinvestment Coalition. "No matter how proactive homeowners are in seeking a loan modification that would prevent foreclosure, banks are gambling with people's homes. By continuing foreclosure proceedings, banks are often prematurely and unfairly taking homes from working families."
An additional 800,000 foreclosures are expected to affect California homeowners in the next year. This modest but important bill will prevent avoidable foreclosures that continue to weigh on the housing market and California economy.
SB729 is co-sponsored by the California Reinvestment Coalition (CRC), the Center for Responsible Lending (CRL), and the California Labor Federation. Sixty-two California groups have signed on in support of the legislation.
The California State Senate Banking & Financial Institutions Committee will hear testimony and vote on SB729 on Wednesday, April 27 at 1:30 p.m. in Room 112. Homeowners will testify at the hearing about their experience with the dual track process.
SB729 is part of the Homeowner Protection Package, a legislative package sponsored by the RE-Fund California Campaign. RE-Fund California is led by the Home Defenders League (a project of the Alliance of Californians for Community Empowerment), PICO CA (People Improving Communities through Organizing), CRC (California Reinvestment Coalition) and SEIU Locals 1000, 521, 721 and 1021.
The California Reinvestment Coalition advocates for the right of low-income communities and communities of color to have fair and equal access to banking and other financial services. CRC has a membership of more than 280 nonprofit organizations and public agencies across the State.
SOURCE California Reinvestment Coalition