Foreclosures Drop 75% Following Passage of Homeowners Bill of Rights
By Rebecca Band
This time last year, hundreds of California families were losing their homes to foreclosure every day. 700,000 families were on the brink of foreclosure, and one-third were underwater in their mortgages, due in large part to shady lending practices that Big Banks employed to rob families of their homes.
But a lot can change in a year, and a new report released this week has found the number of foreclosures in California has dropped dramatically.
According to the Los Angeles Times:
On Tuesday, the real estate website ForeclosureRadar.com reported a 60.5% decline in the number of default notices issued in California in January compared with December. The number of default notices - the first formal step in the state's foreclosure process - that were issued fell 77.7% from January 2012. A total of 4,500 such filings were logged last month, the lowest number since at least September 2006, when the website's records begin. The website gave no explanation for the sharp decrease in notices of default, but noted that the drop coincided with a package of tough new laws that provide homeowners with some of the nation's strongest protections from bank repossession practices taking effect in January.
Those tough new laws are better known as the Homeowners Bill of Rights - a comprehensive reform package passed last year which aims to keep families in their homes and protect them from some of the worst predatory banking practices being employed by the Big Banks. The measure, backed by Labor and championed by Attorney General Kamala Harris, protects homeowners from some of the most egregious predatory Big Bank schemes by
- Prohibiting banks from foreclosing until they give fair consideration to a loan modification.
- Requiring banks to give homeowners seeking a loan modification a single point of contact to make sure they don't get the run-around.
- Increasing penalties for filing false mortgage documents.
When the Homeowners Bill of Rights passed last year, California Labor Federation leader Art Pulaski remarked:
While the big banks and their GOP allies fought this much-needed reform tooth and nail, in the end the legislature chose common-sense reform over the banks' special interest power. That's good for California and a positive sign for our democracy. With California still struggling from the devastating impact of the housing crisis, this legislation puts some power and control back into the hands of homeowners. In a time of deep budget cuts and ongoing recession, this victory restores hope that our state can rise above the politics of decline that's eroding our middle class.
And indeed, our housing market does appear to rising above the politics of decline since the enactment of the Homeowners Bill of Rights, and it's in large part due to the outpouring of support from working families from all walks of life - union and non-union. We proved that when we fight together, we can help improve our lives together.