Posted on Thursday, May 5, 2011
California legislators put two bills aimed at addressing the state’s foreclosure problem to committee votes this week.
Both failed to pass despite the fact that supporters of the proposed laws packed the hearing rooms at the state Capitol, but neither is completely dead. They have both been scheduled for new hearings.
The California Homeowner Protection Act (SB 729) would make it unlawful for a lender to move forward with foreclosure while evaluating the borrower for a loan modification – the common practice referred to as “dual tracking.” The bill states that borrowers must be given a decision on their loan mod application before the formal foreclosure process can begin.
With a 3-3 vote, the SB 729 did not pass the state’s Senate Banking and Financial Institutions Committee. The committee’s seventh member declined to vote.
The bill, sponsored by Sen. Mark Leno (D-San Francisco) and Senate President Pro Tem Darrell Steinberg (D-Sacramento), will be re-heard by the committee on Wednesday, May 4.
Across the way in the other legislative chamber, the bill (AB 935) introduced by Assembly Member Bob Blumenfield (D-San Fernando Valley) would have levied a $20,000 processing fee on banks and servicers for every foreclosure initiated in California.
The money would go into a “Foreclosure Mitigation Fund” and be disbursed to local schools, fire departments, and other community service agencies in order to make up for lost property taxes and other expenses that arise from foreclosures, including maintaining the properties. Blumenfield says the statewide levy could generate up to $16 billion over the next two years.
AB 935 was voted down by the Assembly Committee on Banking and Finance, with four members voting against it, four voting in favor, and four members failing to vote. It will be heard again on Monday, May 2.
In the wake of the robo-signing scandal last fall, both bills have garnered strong backing from constituents, consumer advocacy groups, and grassroots organizations.
By: Carrie Bay DS NEWS