California Housing Advocates Respond to CFPB’s Final Mortgage Servicing Rules

 WIDOWED HOMEOWNERS WILL BENEFIT, BUT SENATE BILL 1150 IS STILL NECESSARY

The Consumer Financial Protection Bureau released its final mortgage servicing rule last week, with stronger protections to prevent unnecessary foreclosures on successors-in-interest, more commonly known as “widow foreclosures” or “red-tape foreclosures.”

Kevin Stein from the California Reinvestment Coalition (CRC) and Maeve Elise Brown from Housing and Economic Rights Advocates (HERA) issued these statements in response to the CFPB’s rules:

“We are glad to see the CFPB issue its much anticipated final rule on mortgage servicing, which clarifies the obligations that mortgage servicers have to work with successors in interest (widows, orphans and similar heirs). As expected, the rule acknowledges that these successors are confronting a variety of hurdles when trying to work with their mortgage servicer to keep their family home,” explains Stein. “To address this problem, the Bureau’s new rule provides confirmed successors the same rights as all borrowers which is positive. At the same time, it was concerning to see the Bureau chose not to include an accountability mechanism (like a private right of action) to ensure the servicers would follow the new rules. And, these new rules won’t take effect until early 2018.”

Brown adds: “Fortunately, pending state legislation, Senate Bill 1150 (Leno, Galgiani), includes a private right of action for California successors to ensure that mortgage servicers are held accountable for following the rules. We learned from the Homeowner Bill of Rights that including this mechanism created accountability and forced mortgage servicers and banks to clean up their acts and stop illegal foreclosures. Senate Bill 1150 would do the same thing for the most vulnerable homeowners in California.” She adds: “The CFPB’s new rules, coupled with SB1150, would go a long way towards leveling the playing field and helping to preserve the largest asset most Americans will ever own.”

Additional Context:

Broad Support: SB 1150 is co-sponsored by Housing and Economic Rights Advocates (HERA), the California Reinvestment Coalition (CRC), and the California Association for Retired Americans (CARA). SB 1150 is supported by California Attorney General Kamala Harris and over 60 well-known organizations, including AARP California, California State Conference of the National Association for the Advancement of Colored People, Courage Campaign, CalPIRG, the Multicultural Real Estate Alliance for Urban Change, the National Council of La Raza, the National Housing Law Project, Neighborhood Housing Services of Los Angeles County, and more. To see a full list of supporters, visit www.survivorbillofrights.org.

Research on Problems faced by successors in interest:

The California Reinvestment Coalition and Housing and Economic Rights Advocates submitted an in-depth legal analysis of the problem and case studies of homeowners in California experiencing these problems to the CFPB, OCC, and Federal Reserve in 2012.

In a 2014 survey of California housing counselors and Legal Aid attorneys, 87% of respondents said the “widows issue” was still a problem, despite federal guidance to mortgage servicers about working with successors in interest to prevent this problem.

A 2016 white paper by Housing and Economic Rights Advocates gives additional context to this problem and the problems it can trigger for older Americans who want to age in place and whose home is their largest asset. Download the paper here: Whose Home Is It Anyway? How The Modern Mortgage Servicing Industry Strips Wealth From Low and Moderate Income Communities In the U.S. And California

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How SB 1150 Would Stop More Foreclosures On California Seniors and Heirs

Senate Bill 1150, authored by Senator Mark Leno and Senator Cathleen Galgiani, is intended to prevent additional, needless foreclosures on widows, widowers, and other heirs in California.

To better understand why SB 1150 is needed, consider the recent story of Jose Hernandez, a widower living in Sacramento, who is slated to lose the home he occupied with his late wife until she passed away in 2011:

Although he inherited the property when his wife died, Hernandez is not protected by California’s Homeowner Bill of Rights, a set of regulations that require lenders to work with homeowners to help them save their homes from foreclosure. He’s not protected because his name was not on the loan or title.

Instead, Hernandez said he’s been lost in the lender’s maze of paperwork and people.

“I must have faxed the death certificate over a dozen times,” Hernandez said. “They said they couldn’t find it. In the end, they just want to foreclose on the property.”

Read the whole story here:

Leno bill would strengthen family heirs’ homeownership rights  (Melody GutierrezSan Francisco Chronicle, July 1, 2016)

SB 1150 provides critical protections for widowed spouses and other survivors including domestic partners, heirs, siblings, joint tenants, and other people who own their homes but who weren’t listed on the mortgage. SBOR closes a loophole in California law that fails to provide important protections to surviving homeowners (against foreclosure) that are available to other homeowners.

If  you’d like to get involved, here’s how you can help:

  1. If you organization would like to be listed as a SUPPORTER of Senate Bill 1150, please contact Kevin Stein, associate director of the California Reinvestment Coalition: kstein AT calreinvest.org.
  2. If you are a surviving homeowner and would be willing to share your story, please reach out to Sean Coffey, media manager at the California Reinvestment Coalition: scoffey AT calreinvest.org.
  3. Reach out to your assembly member, and ask them to support Senate Bill 1150.  A vote is expected on the bill in August.  You can find who your assembly member is here: Who is my California Assembly Member?

 

California Widower Explains Need for SB 1150

Michael Finney’s 7 on Your Side recently looked at Senate Bill 1150 and interviewed a widower from El Dorado County to learn how this problem is affecting people- and how SB 1150 could help fix it:

Ric Hornor lived in a home East of Sacramento with his wife Jody for 19 years before she died of a rare brain disorder.

The El Dorado County man has been fighting to keep his home from foreclosure ever since.

“It’s the first home and I would hope the last home that I would ever own. I love it here,” El Dorado County resident Ric Hornor said.

You can read the whole story here: Proposed Bill Could Protect Widows, Children from Foreclosures

Senate Bill 1150 will be voted on by the full assembly in August, 2016, and we need your help to let your elected officials know why they should vote YES on SB 1150.

Please contact us if you’re interested in helping!

 

California Legislature Moves One Step Closer to Passing Protections for Widowed Homeowners

PROPOSED LAW WOULD BE FIRST IN THE NATION TO PROTECT SURVIVOR HOMEOWNERS

San Francisco, CA June 30, 2016– Earlier this week, California’s legislature moved one step closer to enacting legislation designed to protect widows, widowers, and other heirs from unnecessary foreclosures. Senate Bill 1150, the Homeowner Survivor Bill of Rights (SBOR), was passed out of the Assembly Judiciary Committee on a 7 to 3 vote Tuesday. The next step is a vote by the entire Assembly, which is expected in August.

“Surviving homeowners deserve better than the status quo of needless foreclosures by banks and mortgage servicers. SB 1150 would create an even playing field for widows and widowers by improving communication and giving mortgage servicers clear guidelines to follow,” explains Maeve Elise Brown, executive director of Housing and Economic Rights Advocates, a co-sponsor of SB 1150.

Authored by Senators Mark Leno and Cathleen Galgiani, SB 1150 provides critical protections for widowed spouses and other survivors including domestic partners, heirs, siblings, joint tenants, and other people who own their homes but who weren’t listed on the mortgage. SBOR closes a loophole in California law that fails to provide important protections to surviving homeowners (against foreclosure) that are available to other homeowners.

“We’ve been hearing complaints from nonprofit housing counselors, legal aid attorneys, and widowed homeowners about this problem for several years. Building on the landmark Homeowner Bill of Rights, this bill, if enacted, would be another example of California leading the way to protect homeowners,” adds Kevin Stein, associate director at the California Reinvestment Coalition, a co-sponsor of SB 1150.

“The successful vote earlier this week signifies that issues still matter, and that people still matter,” said Nan Brasmer of California Alliance for Retired Americans (CARA), a co-sponsor of the bill. “We sincerely thank the Assembly Judiciary Committee members who stood up for seniors and other heirs by voting yes on Senate Bill 1150.”

Broad Support: SB 1150 is co-sponsored by Housing and Economic Rights Advocates (HERA), the California Reinvestment Coalition (CRC), and the California Association for Retired Americans (CARA). SB 1150 is supported by California Attorney General Kamala Harris and over 60 well-known organizations, including AARP California, Courage Campaign, CalPIRG, the Multicultural Real Estate Alliance for Urban Change, the National Council of La Raza, National Housing Law Project, Neighborhood Housing Services of Los Angeles County, and more. To see a full list of supporters, visit www.survivorbillofrights.org.

White Paper: Earlier this week, Housing and Economic Rights Advocates released a white paper focused on this issue. The paper (Whose Home Is It Anyways?) explains how women are far more likely to be impacted by this issue; that these needless foreclosures wipe out the main asset most Americans (especially older Americans) own; that older Americans overwhelmingly prefer to “age in place;” and that banks are actively lobbying against these important protections. The paper is available for free download here: Whose Home Is It Anyway? How The Modern Mortgage Servicing Industry Strips Wealth From Low and Moderate Income Communities In the U.S. And California

Senate Bill 1150: How Can I Help Widowed Homeowners?

Dear SB1150 Supporters:

We made it!

Yesterday after taking some amendments, SB1150 (Leno, Galgiani) passed out of Assembly Banking on a vote of 8 to 2!

This is a big step as we try to put in place protections for widows, widowers and other heirs who continue to face unnecessary foreclosures. We could not have done it without all of the support you have provided with your letters, phone calls, texts, in-district meetings, and presence at the hearing.

Now, we move to Assembly Judiciary. The committee is meeting a week from today, Tuesday, June 28 at 9am.

We need to make a (near) final push to get through this committee. Can you pick up the phone and call these assembly members and urge them to vote YES on SB 1150?

Thank you!

The SB 1150 Team

Member Staff Phone
Stone Committee Staff 916-319-2029
Wagner  Lily Movsisyan 916-319-2068
Alejo Paco Torres 916-319-2030
Chau Garret Bazurto 916-319-2049
Chiu Eric Guerra 916-319-2017
Gallagher Joe Zanze 916-319-2003
Cristina Garcia Erinn Ryberg 916-319-2058
Holden Nicholas Liedtke 916-319-2041
Maienschein Matthew Easley 916-319-2077
Ting Jessica Duong 916-319-2019

Law to Protect Widowed Homeowners: How You Can Help

SB 1150 stops bad foreclosures

Imagine losing your wife or husband, and then facing the prospect of losing your home because of bank and mortgage servicer bureaucracy.

New legislation, introduced in California, Senate Bill 1150, would put a stop to these “red tape foreclosures.”

The bill has already passed out of the Senate and the next stop is the Assembly Committee on Banking and Finance.

If you have 5 minutes, can you pick up the phone and let these elected officials know that you support SB 1150 and you think they should also support stopping unnecessary foreclosures on vulnerable California seniors?

Assembly Committee on Banking and Finance Committee Members

Matthew Dababneh (Chair) Dem – 45:  Call him at: (916) 319-2045
Travis Allen (Vice Chair) Rep – 72: Call him at: (916) 319-2072
Katcho Achadjian Rep – 35:  Call him at: (916) 319-2035
Susan A. BonillaDem – 14:  Call her at: (916) 319-2014
Cheryl R. BrownDem – 47:  Call her at: (916) 319-2047
Ed Chau Dem – 49:  Call him at: (916) 319-2049
Mike Gatto Dem – 43: Call him at: (916) 319-2043
David Hadley Rep – 66: Call him at: (916) 319-2066
Young O. Kim Rep – 65: Call her at:  (916) 319-2065
Evan Low- Dem – 28: Call him at: (916) 319-2028
Sebastian Ridley-Thomas Dem – 54 Call him at: (916) 319-2054
Mark Stone Dem – 29: Call him at: (916) 319-2029

 

Widowed Homeowners a Step Closer to Avoiding “Red Tape Foreclosures”

Senate Bill 1150

Last Tuesday, the California Senate voted Senate Bill 1150, the Homeowner Survivor Bill of Rights (Los Angeles Times: Bill aimed at helping widows avoid foreclosure passes state Senate) forward. This means that widows, widowers, and other heirs are one step closer to avoiding what’s been called the “bureaucratic black hole,” when their loved ones pass away and they were the only ones listed on a mortgage.

Housing counselors, attorneys, and consumer advocates have been trying to address this problem for several years now, but banks and mortgage servicers have refused to follow new guidance from regulators on this issue.

In the most common scenario, a husband passes away, and his name was the only one on the mortgage.  When she contacts her mortgage servicer, she will likely face a mind-numbing bureaucracy of incorrect information, being passed back and forth between different departments, and delays lasting months or even years.  Incredibly, in a number of cases, surviving homeowners have been told they can’t talk to the bank until their deceased loved one signs a form authorizing them to do so.

Meanwhile, the foreclosure process is moving forward. Surviving heirs, numb from the loss of their loved ones, are also faced with the prospect of losing the home over their heads.

These survivor have an ownership interest in their home, yet the banks and servicers are engaging in the same practices that caused the California legislature (with strong support from Attorney General Kamala Harris) to pass the Homeowner Bill of Rights.

The next step for the bill is the Assembly Banking Committee.  We anticipate that the bank lobbyists will be working hard to maintain the status quo, so if you’re interested in helping to disrupt that status quo, please contact us.