Date: January 4, 2018
To: All Scheer Law Group Clients and Affiliates:
Subject: HOBR off again, on again?
The California Homeowners Bill of Rights (HOBR) dramatically changed the foreclosure and loss mitigation rights and obligations of borrowers and lenders in residential real estate matters. The HOBR was designed to address the foreclosure onslaught that occurred as a result of the “mortgage meltdown” that occurred after 2007. The HOBR was designed as an interim measure to address the crises, with automatic repeal or modification of many provisions, effective on January 1, of this year. For a review of the recent changes that went into effect go to: https://www.scheerlawgroup.com/2017/client-alert-from-the-scheer-law-group-ca-hobr-changes-prepare-now/
Now some legislators are pining for the “good ole days” and want the old HOBR back. CA SB 818 , introduced on January 3, 2018, provides for reinstatement of some of the lapsed HOBR provisions, including:
1. Reinstatement of the right to appeal the denial of a loan modification.
2. Requirements that servicers provide borrowers with information allowing the borrower to cure deficient loan modification applications so that appeals of any denials can occur. For a review of the proposed bill go to: http://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180SB818
The CA foreclosure rate is currently at one of the lowest points in history. It is safe to say that the foreclosure crises is over, for now. It is doubtful whether additional layers of ” protection” to the foreclosure /loss mitigation process does much more than make a complicated process even more confusing and expensive. Whether the legislators of California will buy into the argument that HOBR needs to be strengthened remains to be seen.
In the meantime, keep your compliance attorney by your side in the event that you embark on resolving questions on foreclosure and loss mitigation issues on covered loans in California. With the new HOBR changes, the implementation of the amendments to the TILA/RESPA Mortgage Servicing Rules (“MSR”) in October of 2017, with more MSR changes to come on April 19, 2018, servicers on covered loans will need a “scorecard” and a lot of hand-holding to ensure that they are not running afoul of existing, upcoming, and possibly soon to be changing laws.
Please call or email if you would like to discuss.