Due to no legislation being enacted/amended to extend borrower protections currently found within the Homeowner Bill of Rights (“HBOR”) (2013) California borrowers have lost the following protections against often overzealous and aggressive mortgage/loan servicers:
1. On and after January 1, 2018, prior to recording an NOD, borrowers will no longer be entitled to a statement from their servicer/lender that the borrower may request the following: (1) A copy of the borrower’s promissory note or other evidence of indebtedness; (2) A copy of the borrower’s deed of trust or mortgage; (3) A copy of any assignment, if applicable, of the borrower’s mortgage or deed of trust required to demonstrate the right of the mortgage servicer to foreclose; (4) A copy of the borrower’s payment history since the borrower was last less than 60 days past due; and/or (5) And if the borrower is a servicemember or a dependent of servicemember, he or she will no longer be entitled to statement from servicer/lender that there may be certain protections under the federal Servicemembers Civil Relief Act (50 U.S.C. Sec. 501 et seq.) regarding the servicemember’s interest rate and the risk of foreclosure, or that counseling for covered servicemembers may be available at agencies such as Military OneSource and Armed Forces Legal Assistance. (Cal. Civ. Code § 2923.55 (2013)).
2. On and after January 1, 2018, if a borrower submits a “complete” application for a first lien loan modification, the mortgage servicer, trustee, beneficiary or authorized agent may record an NOD against the borrower’s interest in his or her home. (Cal Civ. Code § 2923.6(c)(2013) repealed; Cal. Civ. Code § 2924.11 (2018)).
3. On and after January 1, 2018, if a servicer denies a borrower’s application for a loan modification, servicer must still identify the reason(s) for the denial, but servicer is no longer required to: (1) permit borrower to submit an appeal; (2) wait 31 days to conduct a trustee’s sale; (3) withhold recording NOD or NTS during review of gratuitous appeal evaluation; (4) provide specific reasons for investor denial; or (5) provide NPV input values applied in arriving at denial decision. (Cal Civ. Code § 2923.6(c)(2013) repealed; Cal. Civ. Code § 2924.11 (2018)).
4. On and after January 1, 2018, servicers are no longer obligated to provide written notice (or any notice for that matter) to a borrower that a scheduled trustee’s sale was postponed for more than 10 business days following a postponement of a trustee’s sale. (Cal Civ. Code § 2924.9 (2013) repealed).
5. On and after January 1, 2018, servicers are no longer prohibited from charging any application fee, processing fee or any other fee for any foreclosure prevention alternative. Neither will servicers be prohibited from collecting any late fees for periods during which a loan modification application is under consideration or when borrower is making timely modification payments or any other foreclosure prevention alternative is being evaluated. (Cal Civ. Code § 2924.11 (2013) repealed and not replaced with equivalent protections).
6. On and after January 1, 2018, whenever a borrower submits a complete application for a loan modification, or any document in connection with a loan modification, servicers are no longer required to provide written acknowledgment of receipt or any of the following valuable protections: (1) a description of the loan modification process, estimated time for decision, and length of time borrower will have to consider any loan modification offer; (2) any deadlines to submit purportedly missing documents; (3) any expiration dates for submitted documents; and (4) any other deficiencies within borrower’s submitted application for a loan modification. (Cal Civ. Code § 2924.10 repealed).
7. On and after January 1, 2018, if borrower’s servicer approves borrower in writing for a loan modification or any other foreclosure prevention alternative, any successor servicer is not required to continue honoring California’s Homeowner Bill of Rights 2013 vs. 2018: A Pithy Primer 2 any previously approved loan modification or foreclosure prevention alternative granted and entered into by borrower’s predecessor servicer. (Cal Civ. Code § 2924.11(g)(2013) repealed).
8. On and after January 1, 2018, if a servicer issues a denial decision to a borrower’s application for a loan modification, erroneous and objectionable as it may be, servcier and trustee may proceed directly towards completing their scheduled sale and borrower may no longer seek judicial intervention with an application or motion for injunctive relief as Cal. Civ. Code § 2924.11(2018) no longer requires any appeals period or dual tracking protections after a written denial decision has been issued.
Blog Credit: THE WYATT LAW CORPORATION