The California Homeowner Bill of Rights (CHBR) is designed to protect homeowners who are trying to modify their mortgages or sell their homes as a Short Sale. The CHBR, effective January 1, 2013, creates guidelines for most mortgage servicers who start a foreclosure following a default on a:
• First Deed of Trust,
• Owner-occupied,
• 1 to 4 unit residential property.
Prohibits Dual-Tracking
A lender is prohibited from continuing with the foreclosure process:
• While a completed first lien loan modification application is pending, or
• A short sale has been approved.
Provides a Single Point of Contact
When a borrower requests a foreclosure prevention alternative, a mortgage servicer must:
• Establish a single point of contact, and
• Provide the borrower with one or more direct means of communication with them.
Notice of Postponement of Trustee Sales
If a Trustee Sale has been postponed, a lender must give the borrower:
• Written notice of the new sale date and time.
Approvals Binding on Successors
If a loan modification or short sale has been approved and the loan is sold to another lender:
• The subsequent mortgage servicer is required to honor any previously approved foreclosure prevention alternative.
No Fees Allowed
While a foreclosure prevention alternative is being considered lenders may not collect :
• Application fees, or
• Late fees.
Disclosures Required
Prior to recording a Notice of Default (NOD) and within 5 days after recording a NOD, lenders must:
• Give the borrower a notice that explains their alternatives to foreclosure.
Violations of the California Homeowner Bill of Rights Homeowners may:
• Seek an injunction and damages for violations of the CHBR
• File a complaint with the California Department of Real Estate if the violator holds a real estate license.
For more detailed information about the California Homeowner Bill
of Rights consult a real estate attorney or California’s Office of the
Attorney General’s web site: oag.ca.gov
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