Bill Preventing Foreclosures with Approved Short Sales
The California Association of Realtors (C.A.R.) announced its sponsoring a bill that will prevent California homeowners from going into foreclosure if they have negotiated a short sale with their lender or servicer.
Assembly Bill 1745 (Torres, D-Pomona) prevents lenders or servicers from recording a notice of sale if a short sale has been approved. The bill is scheduled for hearing on April 30 by the Assembly Banking and Finance Committee.
The bill would also allow the mortgagee, trustee, beneficiary, or authorized agent to withdraw a short sale approval if a condition in which approval was granted has changed. The bill would require a written notice to the seller no less than 3 days before withdrawing approval, with an explanation of the decision change.
California Attorney General Kamala D. Harris recently introduced her Homeowner Bill of Rights, one of which had a similar provision that prevents dual tracking, or the practice in which a lender proceeds with a foreclosure on a homeowner who is also trying to pursue a loan modification.
Legislators delayed voting on the bill last week before Harris was scheduled to testify. ABC News 10 reported that the California Bankers Association opposed the ban on dual tracking stating it only delays the inevitable.