By Frank D. Russo

Legislation that would reform the foreclosure process in California for the benefit of homeowners trying to hold on to their homes passed the Assembly today on a 55 to 18 vote, just one vote above the two-thirds majority it required. Ten Republican Assemblymembers joined 45 of the 48 Democrats in voting for the bill, while all 18 votes against it came from Republicans.

The bill that passed, SB 1137 is authored by Democratic Senators Don Perata, Ellen Corbett, and Michael Machado, and coauthored by Speaker of the Assembly Karen Bass and principal coauthor Assemblymember Ted Lieu, who presented it on the Assembly floor. It goes beyond federal laws and received broad support from consumer groups. The legislation requires lenders and servicers to: 1) contact borrowers (or engage in a prescribed process to do so) to schedule telephone or in-person meetings on restructuring options before beginning the foreclosure process, 2) requires a 60-day notice to be given to tenants of buildings facing foreclosure before they can be removed from a rental housing unit; and 3) allows fines of up to $1,000 a day for owners of foreclosed properties that fail to adequately maintain them.

“Foreclosures are afflicting thousands of Californians and their communities,” Perata said. “SB 1137 gives homeowners more advanced warning a foreclosure may be coming and provides the tools they need to help avoid it.”

Read more from Frank Russo and the California Progress Report