As California goes, so goes the nation? Let's hope not, at least as to legislation that will make California the first state in the nation to codify provisions of the National Mortgage Settlement. The new provisions will affect all entities that conduct more than 175 foreclosures a year in California. The Assembly and the Senate passed identical bills, and Governor Brown is expected to sign the measure into law today.
Underlying these requirements is a fundamental shift in the obligations of the mortgage servicer, which will include providing a “meaningful opportunity” for borrowers to be considered for loan modifications and other “foreclosure prevention alternatives.” The law imposes additional notice requirements, prohibits dual tracking and robosigning, and regulates the loan modification process. It also exposes servicers, foreclosure trustees, and beneficiaries to very large penalties and payment of attorney’s fees for material violations of the new provisions.
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