State legislation designed to prevent additional home foreclosures has passed by a 32-8 vote in the state senate on Wednesday, and is being sent to the governor for an anticipated signature.
This bill, named SB-1137, would take effect immediately upon signature, and requires lenders to provide a more advanced warning of default, while increasing the frequency of these notices to customers in danger of going into default. The new legislation also provides renters additional time to relocate if the property owners are facing foreclosure. A third stipulation would allow local governments to force the ongoing maintenance of vacant bank-owned property.
According to the governor, "This bipartisan legislation provides one more tool by giving borrowers the critical time needed before a foreclosure to work with their lenders".
The California Mortgage Bankers Association has asserted that this bill will provide borrowers relief with out limiting access to financing or deter investments needed for the restoration of liquidity to the state housing market.
Although the foreclosure rate from January to May increased by 5%, the number of loans reconfigured for a lower payments jumped 49% in the same period, according to the latest Department of Corporations monthly lenders survey.
California lawmakers say this legislation may help decrease the number of foreclosures moving forward, and increase the number of "work outs" helping thousands of homeowners keep their homes.