California has taken a huge hit as a result of the foreclosure and mortgage crisis. However, California also has an attorney general who has been fighting diligently to step up mortgage debt relief efforts and increase lending regulations. Attorney General Kamala Harris has put a few new bills on the table to help spur change in the California mortgage market, many of which are meeting some tough opposition.
Diverting A Crisis
California lawmakers are under the gun to consider some new bills that will change the way mortgage lending is done around the state. Kamala Harris has become a huge advocate for homeowners and has developed the new bills to extend the procedural safeguards suggested as part of the national $26 billion mortgage settlement. Harris wants to ban lenders from moving forward with foreclosures until all alternatives, such as loan modifications, have been considered and increase lender accountability for proving foreclosure protocols have been followed. The new laws would also give homeowners the right to sue lenders who violate foreclosure practices and recover any losses as the result of violations.
Despite the support from homeowners and some government officials, Harris’ bills are meeting staunch opposition. The biggest source of resistance is among lenders, who insist that the foreclosure crisis was just “temporary” and doesn’t justify a change in laws. A coalition of financial-industry and business trade groups have joined to object to the new bills, arguing that the terms put forth by the mortgage settlement only apply to the banks involved in the lawsuit and should leave other lenders out of the equation.