How Does the California Bill of Rights Help You?

Foreclosure mayhem came to California as a result of the 2008-9 financial crisis. In fact, between 2008 and 2011, more than one million homes in California were foreclosed. What’s more, the residual effects of the foreclosure crisis can still be felt today.

In response to the crisis, the California legislature passed the California Homeowners Bill of Rights (HBOR) in 2012. The purpose of the HBOR is to prevent avoidable foreclosure and ensure fair mortgage lending and servicing practices. In many instances, lenders did not provide homeowners with significant opportunity to obtain loss mitigation options, such as loan modifications, in order to avoid foreclosure. The California legislature also found that lenders lacked transparency, which contributed to the crisis.

Key Provisions

Key HBOR provisions include:

Restriction on dual-track foreclosure. Prior to the HBOR, a lender could foreclose on a homeowner while the homeowner sought a loan modification, a process known as “dual-tracking.” Under the HBOR, mortgage servicers are restricted from advancing the foreclosure process once the homeowner completes an application for a loan modification. The foreclosure process can only continue once the application has been fully reviewed.

Guaranteed single point of contact. Prior to the HBOR, homeowners had to call their lenders several times and speak to numerous representatives regarding a foreclosure case. Under the HBOR, homeowners are guaranteed a single point of contact who is knowledgeable in their case. The single point of contact is also charged with compiling all documents regarding that foreclosure case and providing information about foreclosure prevention options.

Verification of documents. The HBOR penalizes robo-signing of documents because such documents are unverified. Lenders who robo-sign unverified documents are subject to a civil penalty of up to $7,500 per loan. In addition, those lenders who violate the anti-robo-signing provision are also subject to other enforcement action by licensing agencies, including the Department of Corporations, the Department of Real Estate, and the Department of Financial Institutions.

Tenant rights. The HBOR requires those purchasing foreclosed homes to give tenants residing at the home at least 90 days before starting any eviction proceeding. If the tenant has a fixed-term lease, then the new owner must honor the entirety of the lease.

Tools to prosecute mortgage fraud. The HBOR extends the statute of limitations to prosecute mortgage-related crimes from one to three years. This allows the California Attorney General’s office to investigate and prosecute complex mortgage fraud crimes.

Tools to curb blight.  The HBOR provides latitude for local governments to implement certain actions aimed at curbing blight caused by multiple vacant homes in their neighborhoods. These instruments include reconstituting code violations as a means to compel the owners of foreclosed property to pay for upkeep.

Enforceability. The HBOR empowers homeowners who battled foreclosure to seek retribution from lenders who materially violate the HBOR foreclosure process. Homeowners can seek injunctive relief from a non-HBOR-compliant lender that pauses the foreclosure process prior to a foreclosure sale and can seek recovery of damages from such a lender following a foreclosure sale.

If you are a California homeowner facing foreclosure, know that the California Homeowner Bill of Rights can help protect your home. Contact RA & Associates to learn more.

RA & Associates is a fiercely dedicated team of skilled real estate and property damage attorneys based in Los Angeles.


RA & Associates
505 N. Brand Blvd.
Glendale, CA 91203


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