California Attorney General Kamala Harris unveiled a legislative agenda aimed at protecting homeowners from unfair practices by banks and mortgage companies.
Harris, with two fellow Democrats in the state Legislature, Assemblyman John Perez and Senator Darrell Steinberg, today introduced six bills that she said will help consumers cope with the state’s mortgage and foreclosure crisis.
Harris said at a press conference in Sacramento, the state capital, that the legislation builds on the $25 billion settlement that she and officials with 48 other states reached with Bank of America Corp., JPMorgan Chase & Co. (JPM), Wells Fargo & Co. (WFC), Citigroup Inc. (C) and Ally Financial Inc. (ALLY) to end a probe of abusive foreclosure practices stemming from the collapse of the housing bubble.
“This is a unique period in time,” Harris told reporters. “We have reached probably the pinnacle” of the mortgage crisis’s damage to California, she said, citing more than two million homeowners who owe more on their mortgages than their homes are worth. “There is work we can do to fix that, and this legislation is one piece of that.”
The bills, if enacted, will strengthen mortgage reforms in the $25 billion agreement, apply them to all California mortgages, and permanently add them to state law, Harris said. The legislation will seek to stop so-called “dual track” procedures, in which homeowners who are paying down mortgages modified by the banks are foreclosed on due to conflicting information coming from the banks, Harris said.
The legislation will offer homeowners in foreclosure a “single point of contact” for information, and impose a $10,000 penalty for robo-signing, in which mortgage firms and their contractors have vouched for thousands of foreclosure documents without verifying their accuracy.
Harris said her office will gain new enforcement powers under the legislation. It will allow her to more efficiently use grand juries to investigate financial crimes occurring in multiple counties, she said. Such probes will be paid for by a $25 fee mortgage servicers will pay when recording a default, she said.
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