California legislation intended to help struggling borrowers remain in their homes was approved by a state committee Wednesday. The identical Senate and Assembly bills are modeled in part after a national housing settlement.
Democratic Senator Ron Calderon is on the committee and voted “yes.” He said the measures would prevent banks from continuing the foreclosure process while a lender is trying to modify their loan:
“The minute a homeowner is late on their payment, they are notified by the bank and the bank at that point will let them know if they have a loan modification available they will allow them to apply.”
Republican Assemblyman Donald Wagner is also on the committee, but he voted “no.” He said the housing market is recovering, and the legislation will mean homes stay on banks’ books longer.
“It’s bad for the market, which impacts homeowners as well as it impacts the banks. It impacts investors and the banks.”
The bills are expected to be voted on by the full legislature next week.
