Three bills failed; Calif. homeowners left to fight foreclosure on their own

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Three Bills Failed

Although some California lawmakers hoped to relieve the crisis, three bills were stopped in committees last week.

Senate Bill 729 would have required banks to give homeowners an answer on loan modification application before initiating foreclosure proceedings.

Assembly Bills 935 and 1321 were also halted in committee and will not be heard this year, but could be heard in the next session, according to legislative staff. AB 1321 would cut critical paperwork delays by requiring counties to record foreclosures within 30 days.

Assembly Bill 935 would have required banks to pay a $20,000 fee on every foreclosure to recoup economic losses by local and state governments.

AB 935's sponsor, Assembly member Bob Blumenfield, D-San Fernando Valley, said he would consider an amendment that would waive that fee for banks offering homeowners a principal write-down for the equivalent market value of the home.

Blumenfield said banks would then have an incentive to lower payments for the current homeowner, rather than turning around and selling the property to someone else.

"People are suffering out there. It's important that we all bear a part of that burden, and banks and lenders should share some of the responsibility," said Blumenfield. He emphasized that the economic impact of foreclosures born by communities needs to be a part of the equation.