Bill to help widows stave off foreclosure passes state Senate committee
Jesus Sequeira, whose income plunged after his wife died, is fighting to save his Canyon Country home. But there’s a glitch: Even though he was listed on the title, only his wife was on the mortgage note
A bill that would give California widows and widowers greater protections against foreclosure passed a state Senate committee Tuesday.
The proposal is geared at giving surviving homeowners who aren’t on the mortgage note a better shot at obtaining a loan modification after their spouse dies.
The Judiciary Committee voted 4 to 1 to approve the bill, which will now go before the full Senate.
Consumer groups say the survivors – who either already owned their homes or inherit them after a death – face considerable resistance from servicers when they try to obtain a loan modification.
Although servicers will generally accept their loan payments, they often give surviving homeowners inaccurate information or require unnecessary documents to prove ownership, stalling a modification while a foreclosure proceeds, advocates say.
See more of our top stories on Facebook >>
Under SB 1150, survivors who aren’t on the mortgage would get many of the protections afforded to borrowers under the California Homeowner Bill of Rights, which became law in 2013.
Servicers couldn’t pursue a foreclosure while at the same time negotiating a loan modification. In addition, widows, widowers and surviving children would gain the right to sue to prevent a foreclosure or for limited economic damages if one occurs.
The proposal has drawn opposition from industry groups that say it is premature because the Consumer Financial Protection Bureau is expected to release federal rules boosting survivors rights this summer. They also worry that the state bill is too broadly written and will open the door to a flood of people coming forward to claim interest in a deceased borrower’s loan.
At the committee hearing Tuesday, Sen. Mark Leno (D-San Francisco), the coauthor, said he was willing to amend the bill as it moves through the Legislature so it would “align†with future regulations from the federal consumer agency.
Reach me by email at [email protected] or on Twitter @khouriandrew
MORE BUSINESS NEWS
Behind the collapse of SunEdison, a solar supernova
Pom Wonderful case not wonderful enough, Supreme Court says
United Airlines pays $37 million to ex-CEO who quit amid a corruption investigation
Inside the business of entertainment
The Wide Shot brings you news, analysis and insights on everything from streaming wars to production — and what it all means for the future.
You may occasionally receive promotional content from the Los Angeles Times.
