Thursday, March 17, 2011

Proposed California law would bill banks for foreclosures

SAN FRANCISCO (KGO) -- A new report out today outlines the impact of California's foreclosure rate on the economy. The report put out by the Home Defenders League says foreclosures costs California taxpayers $650 billion in lost property tax revenues, decreased property values and increased costs to government services.

The group is supporting three bills introduced in the state legislature today that would charge banks a fee for every home foreclosed, require that banks complete the modification process before beginning foreclosure proceedings and mandate full disclosure about which entity owns a mortgage.

"We don't accept the notion that people are losing their homes because there's nothing else can be done. We know there is more that can be done. We know there's more that should be done," Kevin Stein from the California Reinvestment Coalition said.

Read on

Here are the proposed bills:

• The Homeowner Protection Act (SB 729): will require lenders to finish attempting a loan modification with each borrower before continuing with the foreclosure process.

• The Title Transparency bill (AB 1321): will require that all deeds and transfers of mortgage loans be recorded with the County, so that borrowers can confirm in public record who actually holds their mortgage.

• The Foreclosure Fee bill (AB 935): will seek to incentivize loan modifications by adding a disincentive to foreclosing – a $20,000 fee. This fee begins to allow our communities, cities and state to recoup some of the fiscal costs that result from each foreclosure. The revenue will be collected in a state fund and will go to Public Safety, Public Education and Local Governments.


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