Two new state laws are awaiting Governor Jerry Brown's signature. Supporters say AB 278 and SB 900 will strengthen the rights of homeowners facing foreclosure.
One out of every 38 homes listed in the last twelve months in Kern County was a foreclosure, according to local real estate appraiser, Gary Crabtree. Now, others facing the same fate will have some new rights to save their homes.
"It's a good thing," said Katy Hudson, President of the local Consumer Credit Counseling Service.
Hudson says the new laws are just what some of her clients need. They establish a single point of contact for borrowers, fine lenders who use robo-signing, and end dual-tracking. That means a lender can't foreclose on a house while the homeowner is working on getting a modified loan. And, if the homeowner doesn't feel they were given a fair shake at saving their home, if the law takes effect, they can now take their lender to court.
"People who have really suffered a wrong at the hands of their servicer will have some recourse, and with any law you hope that it's used just for that purpose. Will some people try to take advantage of it? Absolutely," said Hudson.
That's what the president of the California Association of Realtors is afraid of. "We're kind of taking the bad with the good," said Scott Tobias.
Tobias says the association supports the end of dual tracking, but they fear the market could get clogged in litigation with the judicial foreclosure process.
"The concern that we have is they could be stalling for time and that will keep the lenders from making a foreclosure in a timely manner, and it will also keep property off of the market."
And, if foreclosures do get tied up in court, Tobias believes lenders might be less likely to loan to those wanting to buy. "If it's hard for the banks and the lenders to foreclose when people aren't making their payments, it's going to be hard for them to make loans."
Something else to watch for is scams. Katy Hudson believes if this becomes law, people will start coming out of the woodwork claiming they can save your home for a fee. She says free housing counseling is available through HUD-approved agencies.
