Happy Independence Day, everyone! This week, we certainly appreciate the value of our democratic system at work. On July 2, the California legislature passed the California Foreclosure Reduction Act (AB 278 / SB 900), which will finally put an end to the unfair “dual track” system—the counterproductive practice of processing foreclosure papers while also moving a family through a loan modification. This historic step is a critical one in a series of those that will repair the housing market.
On April 19, the National Council of La Raza (NCLR), the Center for Responsible Lending, and other local partners rallied on the capitol lawn in Sacramento, California in support of the proposed Housing Bill of Rights under the foreclosure act. By invitation from the California Attorney General Kamala Harris, NCLR President and CEO Janet Murguía testified later that day, detailing the importance of prohibiting dual track. NCLR affiliates also helped generate 400 calls to Senator Ron Calderon letting him and other decision-makers know that this is exactly what the state needs to stop the flow of needless foreclosures. These efforts have culminated in a great success.
We know that the banks fought this legislation very aggressively. According to Americans for Financial Reform, lenders spent $70,000 a day on lobbyists and other efforts to prevent this bill from passing. As informed voters and advocates, we fought back and won. The following are some of our most important wins. The new law:
- Prohibits dual tracking where a bank forecloses on a homeowner at the same time they are negotiating a modification
- Guarantees a single point of contact for struggling homeowners
- Creates civil penalties for fraudulently signing mortgage documents (robosigning)
We know that this law will deeply and positively impact communities of color in particular, as a disproportionate number have been held in limbo or unnecessarily lost their homes when they could have received a loan modification. Many Californians will find relief as a result of the decision, and this commonsense legislation sets a strong precedent for states to follow suit. There is still much we as advocates, homeowners, and renters can do to fight for a sound housing system, but today we have many reasons to celebrate.