Foreclosure Bill Orders Lenders to Talk to Borrowers

Ventura County Star (CA) (07/03/08); Herdt, Tim
California Gov. Arnold Schwarzenegger appears set to endorse an urgency measure obliging lenders in the state to talk to distressed homeowners about how they can avoid foreclosure and prohibiting the lenders from filing a default notice until 30 days after contacting a borrower or making a good-faith effort to do so. Current rules only require lenders to mail a notice of default to initiate foreclosure proceedings, but the measure put to Schwarzenegger on July 2 mandates face-to-face or telephone interaction between lenders and customers. The bill compels lenders to meet again, at the borrower's request, within two weeks of the first contact; forces lenders to provide advance notice to renters occupying homes that are about to be foreclosed; and gives cities more say-so over foreclosed properties in order to keep them from creating blight.