Owning a house is about so much more than just having your name on title for a piece of property. For most Americans, their house is their home; their castle, the place they raise their children, the place they make memories with their families, a place of community and identity.
This reality makes it all the more puzzling as to why lenders think it is appropriate to pursue overly aggressive, occasionally illegal avenues in order to foreclose on their borrowers. For too long, many banks have treated their debtors as little more than a cell in a spreadsheet or a ledger line in their balance book.
Frustration and anger surrounding overzealous foreclosure actions eventually culminated in the California Homeowner Bill of Rights, a landmark piece of legislation that went into effect in 2013. The California Homeowner Bill of Rights, or “CHBOR”, grants important protections to homeowners that prevents banks from uprooting families from their living situations too quickly or callously.
Important Components of the California Homeowner Bill of Rights
Restrictions on “dual tracking” - One of the most common ways that lenders had been taking advantage of borrowers was through a practice known as “dual tracking.” When lenders engage in dual tracking, they outwardly appear to “consider” you for a loan modification, all the while internally prepping their foreclosure actions with no actual intention of granting a modification. This is clearly advantageous for the lender, and leaves the borrower with much less time to find an alternative way out.
Guaranteed single point of contact - A common complaint from borrowers facing foreclosure in the past had been that they could never get a person on the phone who was knowledgeable about their unique situation. Too often, homeowners would be forced to play phone tag with dozens of different bank employees, making it impossible to gain any traction and cure their default. CHBOR requires that you have a single point of contact at the lending institution who is familiar with your file.
Verification of documents - In the past, unverified documents were littered across mortgage files like grains of sand on a beach. This has been one of the most pervasive problems in lending for some time, and the California Attorney General’s office was insistent that verification be addressed in the CHBOR. Now, lenders can be fined up to $7500 per loan for inclusion of unverified documents.
Enforceability clause - Perhaps the most important component of all in the California Homeowner Bill of Rights is its “enforceability clause.” This means that borrowers aren’t just theoretically protected under this bill -- they have actionable avenues to seek relief if their rights are violated. In other words, the enforceability clause allows homeowners to seek injunctive relief via litigation if their CHBOR protections were not followed. The CHBOR allows for litigation to occur both during the foreclosure process as well as after the fact.
The California Homeowner Bill of Rights is an important piece of legislation for several reasons. Not only does it curtail the excesses and overly aggressive actions of big banks; it also recognizes a house as a home, effectively making it much harder to remove an individual or family from their living situation unless there exists just cause to do so.