Democrats in the California legislature have come up with a new plan to regulate the state’s mortgage industry. The package of bills would give homeowners more leverage against their lenders and bar foreclosures while loan modifications are pending.
Banks also wouldn’t be able to use unreliable documents, and would have to provide a single point of contact for homeowners.
Assemblyman Mike Eng chairs the conference committee that wrote the bills. He said even though previous efforts to reform the mortgage industry stalled, he thinks lenders will be satisfied with this legislation.
“We feel that we’ve addressed the main issues that the banks have brought to us and done so in a way that will be helpful to consumers and we think at the end of the day nobody benefits from foreclosures,” said Eng.
The plan would also let homeowners sue mortgage providers who break state law. The conference committee could vote on the legislation as soon as Monday.
