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A proposed California law, SB1275, seeks to prevent similar situations by requiring lenders to give a decision on loan modifications before starting foreclosure proceedings.
A similar provision took effect Tuesday for banks complying with the federal Home Affordable Modification Plan, or HAMP, but the California law goes a step further by specifying that borrowers can sue lenders that foreclose in violation of the bill’s provisions, which also include detailed notification rules.
“Having a clearly defined consequence makes it more likely, we hope, that the servicers will avoid making the mistake in the first place,” said Paul Leonard, director of the California office for the Center for Responsible Lending. “Despite their best efforts, servicers continue to have capacity problems where the left hand doesn’t know what the right hand is doing.”
Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/06/01/BU761DO896.DTL#ixzz0phVwhzfg
