Aug
31 Proposed legislation that would have provided foreclosure protection to homeowners undergoing the loan modification process has been rejected in the California Assembly. Banks and lending institutions are pleased with the ruling, but consumers, who highly supported the foreclosure protection proposal, are incensed with the Assembly’s decision.
According to the San Francisco Chronicle, the legislation would have prevented lenders from beginning foreclosure proceedings until after they rendered a decision about a consumer’s loan modification status. The bill would have also allowed homeowners to sue if they failed to comply with the measure.
Lenders that choose to participate in the federal government’s modification program are barred from initiating a foreclosure until the application has been officially decided upon. But according to the Chronicle, the government does not have an “enforcement mechanism” to ensure compliance with this rule.
Senator Mark Leno, who authored the legislation, said he will continue to explore options to help homeowners avoid foreclosure and protect their assets.
“We think we had a very wise compromise (in the bill), unless your philosophy is that the lenders should not be held accountable and not have repercussions for their actions,” Leno told the newspaper.
Thousands of Americans have received aid through the federal modification program, but lenders are continuing to impose strict eligibility criteria and credit score requirements. State programs and refinancing programs are popping up across the country to provide an alternative for the many homeowners that find themselves ineligible for a modification. According to the latest figures from RealtyTrac, foreclosure filings in the U.S. may reach 3 million by the end of the year.
Similar Posts:
- Hundreds of lenders face action from FHA Mortgage Review Board
- Report shows that 75 percent of modified homes will re-default
- Lenders continue to face scrutiny over faulty foreclosure documents
- JP Morgan Chase to continue foreclosure filings
- Paperwork issues may prolong foreclosure crisis
