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Buyers of Foreclosed Homes to Get Added Protections

State law will give those who purchase a foreclosed home in disrepair additional time to address code violations.

A bill giving homeowners who have recently purchased a foreclosed home additional time to remedy any code violations and would help compel the owners of foreclosed property to pay for upkeep has been signed into law, the State Attorney General’s office announced Monday.

Governor Jerry Brown signed Assembly Bill 2314, which was sponsored by local assembly member Wilmer Amina Carter (D-Rialto). The bill provides additional tools for local governments and receivers to fight neighborhood blight caused by vacant homes, said officials with Attorney General Kamala Harris’ office.

“The foreclosure crisis has had a devastating impact on many families and communities,” Harris said through a news release. “This legislation will help victims of the crisis who remain in their homes, but have been forced to endure the negative economic, health and safety consequences of blight in their neighborhoods.”

Diamond Bar's foreclosure rate is not high compared to the rest of the county, but there were still 48 foreclosures reported in the city in July, according to RealtyTrac.com. The entire county had 57,570 total foreclosures last month.

“We need solutions to the problem of blight which threatens the health and safety of California communities hit hardest by the mortgage crisis,” Carter said. “AB 2314 will ensure that local jurisdictions continue to have the tools to prevent and fight neighborhood blight due to foreclosures.”

The new law is part of the California Homeowner Bill of Rights, which builds upon and extends reforms first negotiated in the recent national mortgage settlement between 49 states and leading lenders, according to Harris’ office.

Harris secured up to $18 billion for California homeowners in that agreement and built a Mortgage Fraud Strike Force to investigate crime and fraud associated with mortgages and foreclosures, state officials said.

In July, two key parts of the Homeowner Bill of Rights were signed into law. Those bills, which came out of a two-house conference committee, provide protections for borrowers and struggling homeowners, including a restriction on dual-track foreclosures, where a lender forecloses on a borrower despite being in discussions over a loan modification to save the home, according to Harris’ office. The bills also guarantee struggling homeowners a single point of contact at their lender with knowledge of their loan and direct access to decision makers, officials said.

Other components of the Homeowners Bill of Rights are pending in the state legislature. These will enhance law enforcement responses to mortgage and foreclosure-related crime, in part by empowering the Attorney General to call a grand jury in response to financial crimes spanning multiple jurisdictions. A bill to provide enhanced protections for tenants in foreclosed homes has passed both houses and is awaiting action by Governor.

Joe Van Fossen September 27, 2012 at 06:06 PM
Great article! I also thought you might find this interesting: http://nationalmortgagesettlement.com/ There was a settlement reached between the government and 5 major banks that could help out a lot of people who have been foreclosed on or went through short sales. People who think they may qualify, can visit the website and file a claim. I don't know why this information isn't more widespread, but the money is limited, so I hope to see more coverage of this soon.

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