New Homeowners BOR changes for 2018

Don’t forget this if your a California property borrower: New laws for 2018:

You CAN still get restraining orders against lenders.

Be mindful things changed….some good, some not so much….read on:

Changes to the California Homeowner Bill of Rights

In general, some sections of the original California Homeowner Bill of Rights (HOBR1) have been eliminated; several sections have been changed; and still other sections remain unchanged. The net effect is that servicers, under the revised California Homeowner Bill of Rights (HOBR2), need only comply with the less onerous provisions formerly applicable to small servicers under HOBR1.

The Changes (eff. 1/1/2018)

• Pre-NOD Letter is Eliminated: Servicers no longer need to send a letter that describes the Servicemembers Civil Relief Act, as well as details that the borrower can request a copy of the note, the deed of trust, assignments, and payment history. This type of letter previously had to be sent by large servicers before recording the Notice of Default (NOD) [section 2923.55(b)(1)].
• Five-Day Post-NOD Letter is Eliminated: Servicers no longer need to send a notice to the borrower that the borrower may be evaluated for loss mitigation alternatives and provide the method to apply for those alternatives. Large servicers were previously required to send these letters within five days after the recording of the NOD [section 2424.9].
• Written Notice of Foreclosure Sale Postponement is Eliminated: The servicer’s foreclosure trustee no longer needs to send a written Notice of Foreclosure Sale Postponement that previously had to be sent under certain circumstances [section 2924(a)(6)].
• Requirement to Acknowledge Receipt of Loss Mitigation Documents is Eliminated: Servicers no longer need to send to the borrower a letter (within five business days after receipt of any document sent as part of a loss mitigation application) acknowledging receipt of the document, and containing certain other detailed information [section 2924.10].
• Appeal Process for a Loss Mitigation Denial is Eliminated: Servicers no longer need to provide an appeal of a denial of an application for loss mitigation. Previously, large servicers were required to allow an appeal following the denial of an application for loan modification and follow a very rigorous set of steps, all of which have now been eliminated [section 2923.6(e) and new section 2923.11].
• Requirement to Provide Borrower a Copy of the Fully Executed Loss Mitigation Agreement is Eliminated: [old section 2924.11(c)].
• Requirement to Rescind an NOD and Cancel a Foreclosure Sale upon Execution of a Permanent Loss Mitigation Agreement is Eliminated: [old section 2924.11(d)].
• Prohibition against Charging Fees for the Loss Mitigation Process is Eliminated: [old section 2924.11(e)].
• Prohibition against Charging Late Charges during the Loss Mitigation Process is Eliminated: [old section 2924.11(f)].
• Requirement to Include the HUD Toll-Free Number in the Certified Letter is Eliminated: [old section 2923.55(f)(3) and new section 2923.5(e)(3)].
• Prohibition against Dual Tracking when filing an NOD is Eliminated: Servicers no longer need to delay the filing of an NOD if there is a completed loan modification application.
• $7,500 Civil Penalty for the Repeated Filing of Inaccurate Foreclosure Documents is Eliminated: Section 2924.17(c) includes a $7,500 civil penalty that could be assessed against a servicer by certain California governmental agencies for the repeated filing of inaccurate foreclosure documents; however, section 2924.17(c) expired by its statutory language on January 1, 2018. Accordingly, effective January 1, 2018, there is no longer a $7,500 civil penalty.

The HELPFUL for the Borrower Changes (eff. 1/1/2018)

• The Prohibition against Repeated Loss Mitigation Applications has been Eliminated: The old section 2923.6(g) provided that a servicer need not review a new loan modification application if the borrower had a prior application that was previously and fairly considered, and there was no material change since the borrower’s last application. That protection is not found in HOBR2 and, thus, multiple applications must theoretically be reviewed.
• The Types of Completed Loss Mitigation Applications that Prohibit Dual Tracking have been Expanded: As noted above, HOBR2 eliminates the prohibition against dual tracking in relation to the filing of an NOD. However, whereas HOBR1 only precluded dual tracking upon a completed loan modification application, HOBR2 precludes dual tracking upon completion of any type of loss mitigation application. Accordingly, if there is any type of completed loss mitigation application, a servicer can proceed with its NOD but cannot proceed with its Notice of Sale or foreclosure sale.
• Protection from Liability for Signatories of Bank of America, et al. Consent Judgment is Eliminated: Old section 2924.12 provides that those who had signed the Bank of America, et al. Consent Judgment, and complied with the requirements of that order, would have no liability for a violation of the HOBR1 provisions. New section 2924.12 deletes this protection from liability.
• Purported Duty of Servicers to do Loss Mitigation Pertains to All Loans: Old section 2923.15 limited the application of certain sections of HOBR1 to owner-occupied residential real property containing no more than four dwelling units. Section 2923.6 (Purported Duty of Servicers to do Loss Mitigation) was among the sections listed in old section 2923.15, and, thus, old section 2923.6 was limited to only owner-occupied residential real property containing no more than four dwelling units. New section 2923.15 deletes any reference to section 2923.6, and thus all loans are now subject to the purported duty of services to do loss mitigation.

Immediate Action Needed
To record a Notice of Default, a servicer must sign a declaration indicating that it has complied with the provisions of old section 2923.55 (large servicers) or old section 2923.5 (small servicers). Since old section 2923.55 was repealed effective January 1, 2018, all servicers are now subject to new section 2923.5; therefore, the form declaration used by large servicers will have to be updated to reflect this change.

CFPB Servicing Rules
Although HOBR2 makes the California loss mitigation and foreclosure process significantly less burdensome, servicers remain subject to the CFPB Servicing Rules, which still require action similar to the provisions of HOBR1. In short, there is little relief.

Additionally, Senate Bill 818 (which was introduced in the California Senate on January 3, 2018) seeks to reinstate many of the provisions of HOBR1 that sunset. More specifically, it affects the large servicer, defined as those servicers conducting more than 175 foreclosures in a year. Progress of this bill will be watched. Look for a more detailed analysis if, and as, SB 818 works its way through the legislative process.

Changes to Recording Fees, (eff. 1/1/2018)
Despite substantial opposition from real estate industry groups (including the California Mortgage Bankers Association) on September 29, 2017, Senate Bill 2 Atkins, Chapter 2 of the Statues of 2017 (commonly referred to as “SB 2”), was signed into law in California. This bill provides that effective January 1, 2018, a $75 recording fee will be imposed for every transaction on each single parcel of real estate requiring a recording fee, in addition to any other loc

This law is effective 1-1-18.
For a free consultation call Consumer Rights Defenders today at 818.453.3585.

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