Date: December 19, 2017
To: All Scheer Law Group Clients and Affiliates:Subject: HOBR Changes Effective January 1, 2018. Prepare Now
Significant changes to the California Homeowners Bill of Rights (“HBOR”) will go into effect on January 1, 2018. Some parts of HBOR have been eliminated, other parts have been changed and still other parts remain the same. A chart summarizing some of these changes is attached.
The following are of particular interest:
- Smaller and larger servicers are now treated the same (with many larger servicer requirements removed). Pre-foreclosure notice requirements applicable to all servicers are contained in Civ. Code §2923.5.
- Dual Tracking provisions have been consolidated into (new) Section 2924.11, which prohibits recording a notice of sale or conducting a foreclosure sale upon receipt of a “complete application for a foreclosure prevention alternative. “ This means that anytime a servicer receives a completed loss mitigation application for any available loss mitigation option (e.g. loan modification, DIL, short pay off), that the servicer cannot record a notice of sale or conduct a foreclosure sale until the application is approved or denied.
- Good news is that the appeal period applicable to a denial of a complete written application for a loss mitigation option is no longer applicable (See Civ. Code §2924.11).
- Bad news is that Civ. Code §2923.6(g), which limited review of loan modification applications to one completed application, in the absence of “changed material circumstances”, is no longer in effect. This will allow borrowers to submit serial loan modification applications, and highlights the need for each servicer to have solid policies and procedures in effect to confirm what a completed application is and how to handle serial applications, to avoid delay.
Jon Seigel of SLG has prepared the attached chart comparing prior provisions and changes that will go into effect on 2018. Please contract Jon if you want to discuss.
Please note: Prior changes to the TILA/RESPA Mortgage Servicing Rules (“MSR”) went into effect on October 18, 2018. More are coming on April 19, 2018 (relating to bankruptcy and successor issues). What HOBR gives on one hand may be taken away by the MSR, on the other hand, on covered loans. Please go to the SLG website for prior updates on the MSR. While there are some exemptions from the MSR for smaller servicers, all servicers are covered to some extent by the MSR provisions i.e. foreclosure waiting period, successor rules, on covered loans. It is critical that all Lender/servicers in CA be aware of the interaction and obligations of the new HOBR and the MSR.
Please call or email either Jon Seigel or me if you would like to discuss.