“A proposed California law, SB1275, seeks to…[require] lenders to give a decision on loan modifications before starting foreclosure proceedings.
A similar provision took effect Tuesday for banks complying with the federal Home Affordable Modification Plan, or HAMP, but the California law goes a step further by specifying that borrowers can sue lenders that foreclose in violation of the bill’s provisions, which also include detailed notification rules.”
∙ Loan legislation seeks to prevent foreclosures [SFGate]
∙ Lenders (And The Market) About To Be HAMPstrung? [SocketSite]
∙ QuickLinks: Another Foreclosure Wave Forming Just Offshore? [SocketSite]
Given that the federal provision seems to cover the bulk of what SB1275 does minus enabling a “private right of action”, I think the Schwarzenegger veto message almost writes itself. Of course, I didn’t think he’d sign that $10,000 home buyer tax credit what with the state looking at a $19 billion deficit so what do I know.
The Chronicle writer, probably in service of trying to drum up reader sympathy, forgets to tell us if the profiled couple, a “part-time waiter” and real estate agent married to a woman who cleans houses for a living, put twenty percent down and had a conforming loan.
Bill summary is here:
http://info.sen.ca.gov/pub/09-10/bill/sen/sb_1251-1300/sb_1275_cfa_20100402_120733_sen_comm.html
Politically expedient but very bad public policy.