California to Play a Lead Role in 50-State Probe of Foreclosure Practices
Wednesday, October 13, 2010
California will take a lead role in the 50-state inquiry into foreclosure practices by banks. The Golden State has a jumpstart on the investigation.
The California Attorney General's office has already sent letters to major lenders asking them to provide proof they're complying with the law. State law bars banks from issuing mortgage default notices between 2003 and 2007 unless the lender checked whether a borrower is eligible for a loan modification. But California officials were concerned that banks may not have followed that law after recent acknowledgements by major lenders that their employees signed foreclosure affidavits without reading the documents. There have been more than three thousand foreclosures in San Diego County in the first half of this year. Brown says the inquiry may offer a reprieve to some people who are on the brink of losing their home.
"Other homeowners…they're going to get what the law requires," Brown said. "They're going to get a modification."
But the attorney general said the investigation will not end the foreclosure tragedy.
"There are people who have lost their jobs, can't make any payments," Brown said. "There are people whose homes dropped 50 percent. But there is some relief. All 50 attorneys general from all 50 states are telling the banking industry do what's right by our borrowers."
California sits on the executive committee leading the investigation.