California Homeowner Bill of Rights (SB 900)
The California Homeowner Bill of Rights (CHBR) is designed to protect homeowners who are trying to modify their mortgages or sell their homes as a Short Sale. The CHBR, effective January 1, 2013, creates guidelines for most mortgage servicers who start a foreclosure following a default on a:
• First Deed of Trust,
• Owner-occupied,
• 1 to 4 unit residential property.
Prohibits Dual-Tracking
A lender is prohibited from continuing with the foreclosure process:
• While a completed first lien loan modification application is pending, or
• A short sale has been approved.
Provides a Single Point of Contact
When a borrower requests a foreclosure prevention alternative, a mortgage servicer must:
• Establish a single point of contact, and
• Provide the borrower with one or more direct means of communication with them.
Notice of Postponement of Trustee Sales
If a Trustee Sale has been postponed, a lender must give the borrower:
• Written notice of the new sale date and time.
Approvals Binding on Successors
If a loan modification or short sale has been approved and the loan is sold to another lender:
• The subsequent mortgage servicer is required to honor any previously approved foreclosure
prevention alternative.
No Fees Allowed
While a foreclosure prevention alternative is being considered lenders may not collect :
• Application fees, or
• Late fees.
Disclosures Required
Prior to recording a Notice of Default (NOD) and within 5 days after recording a NOD, lenders must:
• Give the borrower a notice that explains their alternatives to foreclosure.
Violations of the California Homeowner Bill of Rights
Homeowners may:
• Seek an injunction and damages for violations of the CHBR
• File a complaint with the California Department of Real Estate if the violator holds a real estate license.
For more detailed information about the California Homeowner Bill
of Rights consult a real estate attorney or California’s Office of the
Attorney General’s web site: oag.ca.gov
