Kamala Harris

Attorney General Kamala D. Harris is supporting the Homeowner Survivor Bill of Rights, California Senate Bill 1150, legislation.

The bill is authored by Senators Mark Leno, D-San Francisco, and Cathleen Galgiani, D-Stockton.

The proposed bill would require companies that collect payments from borrowers—mortgage loan services— to communicate with the widowed spouses and survivors of homeowners to ensure that survivors receive accurate information about assuming responsibility for a mortgage and avoiding foreclosure. This legislation builds on Attorney General Harris’ work in 2011, when she secured $20 billion in relief for California homeowners.

“Following the devastating loss of a loved one, too many Californians also face the possibility of being stripped of their home. This proposed legislation requires mortgage servicers to communicate with spouses and children of deceased homeowners and gives them a fighting chance to stay in their homes,” said Harris. “I thank Senators Leno and Galgiani for their efforts to extend critical financial and legal services to Californians facing unnecessary foreclosures.”

The proposed legislation would allow survivors or heirs to simultaneously apply for both loan assumption and loan modification and provide a single point of contact with the lender. The California Senate Banking Committee will hold a hearing on the legislation this afternoon.

“Instead of getting basic information on how to proceed with a home loan following the death of a loved one, surviving spouses and children face a labyrinth of paperwork and conflicting directions and requests, which only prolongs their grief,” said Senator Leno. “Many family members unnecessarily lose their homes without ever knowing they had the right to assume the loan or seek foreclosure remedies. Before more families give up, we must step in.”

“As California’s senior population increases, so does this problem. Through its common-sense protections, SB 1150 would prevent additional, unnecessary, ‘red-tape foreclosures’ on widows, widowers and other heirs,” said Kevin Stein, Associate Director at California Reinvestment Coalition.

In 2013, the Consumer Financial Protection Bureau issued guidance stating that “servicer[s] must have policies and procedures reasonably designed to ensure that, upon notification of the death of a borrower, the servicer promptly identifies and facilitates communication with a successor in interest of the deceased borrower with respect to the property that secures the deceased borrower’s mortgage loan.” Despite this guidance, the California Department of Justice continues to receive reports that mortgage servicers are refusing or failing to communicate with widows and orphans of deceased homeowners. SB 1150 would require servicers to communicate with successors and prevent families from facing unnecessary foreclosures after the deaths of their loved ones.

In 2012, Attorney General Harris helped to enact the California Homeowner Bill of Rights (HBOR), a landmark package of laws establishing key mortgage and foreclosure protections to California homeowners and borrowers. The laws, which took effect on January 1, 2013, restrict dual-track foreclosures, guarantee struggling homeowners a reliable point of contact at their lender, impose civil penalties on fraudulently signed mortgage documents, and require loan servicers to document their right to foreclose. Dual-track foreclosures refer to a practice whereby a lender forecloses on a home while homeowners are simultaneously seeking a loan modification.

The California Homeowner Bill of Rights also extended the statute of limitations to prosecute mortgage fraud-related crimes to three years and allowed the Attorney General’s office to use statewide grand juries to investigate and indict the perpetrators of financial crimes involving victims in multiple counties. For more information, see http://oag.ca.gov/hbor.

In May 2011, Attorney General Harris created a Mortgage Fraud Strike Force within the California Department of Justice to investigate and prosecute misconduct at all stages of the mortgage process and in February 2012, Attorney General Harris secured an unprecedented settlement with the nation’s five largest banks, securing $20 billion in relief for California homeowners.

SB 1150 is sponsored by the California Alliance for Retired Americans, Housing and Economic Rights Advocates and California Reinvestment Coalition.