California Attorney General Kamala Harris has announced her support of S.B. 1150 — the Homeowner Survivor Bill of Rights — that would add a provision to the California’s Homeowners Bill of Rights (HBOR) to protect widowed spouses and children from foreclosure after the primary mortgage holder dies.
The bill was introduced in February 2016 to close a loophole in HBOR that fails to provide surviving spouses and children with important protections against foreclosure that are available to other homeowners.
S.B. 1150 clarifies the responsibilities of a mortgage lender or servicer when a primary mortgage holder dies and a successor wishes to assume the home loan. The bill requires mortgage servicers to:
- Provide accurate information about assuming the loan and foreclosure prevention alternatives;
- Provide successor with a single point of contact;
- Allow a successor to either assume the existing loan, unless an assumption is prohibited by the loan terms, or provide the successor with a foreclosure prevention alternative upon request and, if the successor qualifies for the foreclosure prevention alternative, allow the successor to assume the loan.
In addition, mortgage servicers cannot record a notice of default until the servicer both (1) requests documentation of the death of the borrower in writing and provides 30 days for receipt of that documentation, and (2) requests written documentation from a claimant regarding his or her status as a successor in interest in the property and provides 90 days for receipt of that documentation.
“Following the devastating loss of a loved one, too many Californians also face the possibility of being stripped of their home,” Harris said. “This proposed legislation requires mortgage servicers to communicate with spouses and children of deceased homeowners and gives them a fighting chance to stay in their homes.”
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