With the New Year comes new changes – including many to California’s Homeowner Bill of Rights(“HBOR”). While it has not been fully repealed (as many loan servicers incorrectly assume), several sections of HBOR have been replaced or revised.
Many of these new rules (all of which have automatically gone into effect as of January 1, 2018) may seem less burdensome for loan servicers; however, there are specific changes that still protect Homeowner’s rights. Luckily, we’re here as a guide to explain HBOR’s changes to help homeowners understand what these changes mean for them.
Section 2923.5 replaces Civil Code Section 2923.55. The primary changes here are regarding service-members and the statement that the borrower can request a copy of the note, assignment, deed of trust, or payment history is no longer included.
Most loan servicers will be treated the same from here on out, with the changes to HBOR removing the distinctions between servicers conducting more than 175 annual foreclosures from those conducting less.
Despite these changes, under the “new” Section 2923.5, mortgage servicers are still required to contact the borrower, or exercise “due diligence” in attempting to contact the borrower, in order to explore alternatives to foreclosure, prior to recording a Notice of Default. These measures are in place to protect homeowner’s who are being foreclosed upon. In addition, a mortgage servicer must also comply with the Section 2924.11(a), the new dual-tracking provision as well.
DUAL TRACKING & LOAN MODIFICATION
In Section 2923.6, the provisions prohibiting dual tracking are now replaced by the (new) Section 2924.11. This prohibits recording a notice of sale or conducting a foreclosure sale upon receipt of a “complete application for a foreclosure prevention alternative.” The dual tracking prohibition now applies to all applications for all foreclosure prevention options, not just loan modification applications.
Section 2924.11 no longer requires an appeal period following a written denial. However, the specific reasons for the denial, as well as a statement that the borrower may obtain supporting documentation (after written request to the mortgage servicer), is required.
Section 2923.6(g) has been removed entirely, and there is no replacement in the revised HBOR. Due to this, it may be that loan servicers, regardless of whether there is a change in financial circumstances, must review multiple applications.
Due to the changes to Section 2924(a)(5), servicers or their foreclosure trustees no longer must provide written notice to a borrow if a sale is postponed more than 10 business days. Pursuant to Section 2924.12, the private right of action for a borrower to enforce HBOR only applies to a material violation of “sections 2923.5, 2923.7, 2924.11, 2924.17.”
Section 2923.7 hasn’t changed, meaning that this section only applies to servicers who conduct more than 175 annual foreclosures – despite the attempts to remove such other changes from the HBOR.
Navigating the Changes
With these many changes, borrowers may be left wondering how their rights will be impacted by the changes to the HBOR and whether their mortgage servicer is in compliance with these new procedures.
The Estavillo Law Group is committed to seeing homeowners through these changes – as well as any difficulties that may arise. As we advance further in 2018, and as you begin to feel the effect of these changes to California’s Homeowner Bill of Rights, we will be by your side through it all, especially during the troubling times of a foreclosure on your home.