SACRAMENTO, Calif. — California will become the first state to write into law much of the national mortgage settlement negotiated this year with the nation's top five banks, if state lawmakers approve wide-ranging legislation on Monday.
Majority Democrats say they have the votes to send the homeowner protection package to Gov. Jerry Brown despite opposition from business and lending organizations.
The legislation would require large lenders to provide a single point of contact for homeowners who want to discuss loan modifications. It would prohibit lenders from foreclosing while the lenders consider homeowners' request for alternatives to foreclosure. And it would let California homeowners sue lenders to stop foreclosures or seek monetary damages if the lender violates state law.
The protections would benefit all California homeowners, not just those whose mortgages are with the five banks that signed the national settlement in February. And many of the restrictions would become permanent, while those in the nationwide agreement will end after five years.
Attorney General Kamala Harris said the compromise legislation negotiated with lawmakers "is going to bring transparency and fairness to California homeowners in a way they've never had before."
She helped negotiate the February settlement that requires Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc. to pay $18 billion in penalties to California homeowners.
Key portions of her original proposal to write the settlement into state law were stalled by opposition from some of her fellow Democrats in the Legislature, until the right to sue banks and other measures were significantly narrowed.
Lenders' organizations joined by the California Chamber of Commerce said in a letter to lawmakers on Friday that the final legislation is an improvement, though they still fear it will "encourage frivolous litigation" by borrowers who cannot realistically afford to stay in their homes.
"The point is ... not to launch an avalanche of lawsuits. What it's really about is having some meaningful accountability to ensure that servicers follow the rules," said Paul Leonard, director of the California office of the Center for Responsible Lending, a consumer group.
Previous efforts have repeatedly failed to clear the Legislature. Leonard said the national mortgage settlement and Harris' involvement are likely to make the difference this year.
- University of Phoenix founder dies, leaving...
- Running again? Mitt Romney tells Hugh Hewitt...
- 10 things to know about corporate inversions
- A New York Times article said Michael Brown...
- It's about time the government recognize the...
- UN: Ebola cases could eventually reach 20,000
- Is James Foley a martyr? A brutal death...
- Angelina Jolie, Brad Pitt wed privately at...
- A New York Times article said Michael... 41
- Running again? Mitt Romney tells Hugh... 33
- For the first time in American history,... 30
- 10 things to know about corporate... 27
- Doug Robinson: When did Missouri turn... 24
- Obama back at White House after summer... 17
- Why the poverty cycle is harder to... 15
- Winning plaintiffs in 3 states want... 14