California legislators recently passed what is believed to be among the strongest foreclosure protections for homeowners in the United States. The law is widely expected to be signed by the Governor.
The new protections would make California the first state in the nation to prohibit banks from a practice known as “dual tracking.” Dual tracking occurs when a bank is negotiating a mortgage modification with homeowners while at the same time pursuing foreclosure actions.
The law also provides further protections for homeowners. For example, the law will allow homeowners to sue banks for damages in limited circumstances when the bank willfully, intentionally, or recklessly violates foreclosure laws. Additionally, the law requires that homeowners be given a single bank representative to work with so that some of the bureaucratic red tape, frustrations, and delays can be avoided.
The new law was opposed by the banking and real estate industries, who claim that it is ambiguous, that it will lead to frivolous lawsuits, and that it will raise real estate costs while harming the real estate market.
Since the law was passed in California, it only affects California homeowners. However, other states, such as Minnesota, have also struggled with foreclosure problems over the past few years, and Minnesota lawmakers may carefully watch what happens with the California law to determine if such a law makes sense in this state. Our Minneapolis foreclosure lawyers remind Minnesota homeowners that they do have certain legal rights and that they should contact an experienced lawyer if they are behind on mortgage payments.