California Foreclosure Reduction ActThe California Foreclosure Reduction Act (“Act”), commonly referred to as the Homeowner Bill of Rights, became effective January 1, 2013, significantly changing the landscape of the non-judicial foreclosure process in California. The Act applies to all mortgage servicers that conduct foreclosures in this state. However, many provisions in the Act apply to mortgage servicers that have foreclosed on more than 175 homes during the preceding year. Below is a summary of the Act and a list of such mortgage servicers previously licensed by the former Department of Corporations, now licensed by the Department of Business Oversight. At this time, no state-licensed bank or credit union previously licensed by the former Department of Financial Institutions, now licensed by the Department of Business Oversight, has more than 175 foreclosures.
Please note that this list is not an exhaustive list of all mortgage servicers. If you do not see your servicer on the list, it may be due to the following reasons:
- Your mortgage servicer may be licensed by the Department of Business Oversight and has foreclosed on 175 or fewer homes. The list on this page is a compilation of mortgage servicers licensed and regulated by the Department of Business Oversight that have foreclosed on more than 175 homes during the preceding year. Mortgage servicers with 175 or fewer foreclosures must comply with the Foreclosure Reduction Act, but have less compliance requirements. Please see Release 65-FS for more information about mortgage servicers with 175 or fewer foreclosures. To check if your mortgage loan servicer is licensed by the Department of Business Oversight, visit www.dbo.ca.gov/fsd/licensees or call 1-866-275-2677.
- Your mortgage servicer may be licensed by the Bureau of Real Estate at the Department of Consumer Affairs (formerly known as the California Department of Real Estate). Among real estate licensees and other entities, the Bureau of Real Estate licenses and regulates mortgage servicers. For more information about the Bureau of Real Estate, visit www.bre.ca.gov or call 1-877-373-4542.
- Your mortgage servicer may be a national bank mortgage servicer federally regulated by the Office of the Comptroller of the Currency (“OCC”). Please click on www.occ.gov/index.html for more information.
Please refer to Release 65-FS for a thorough summary of the Foreclosure Reduction Act, including operative and sunset dates for specific provisions.
Summary of the Act for Mortgage Servicers with More than 175 Foreclosures
- Prohibition on Dual Tracking
A mortgage servicer is prohibited from commencing or continuing the foreclosure process while a completed loan modification application submitted by a borrower is pending, until (1) the mortgage servicer makes a written determination that the borrower is not eligible for a loan modification and any appeal period has expired;
(2) the borrower does not accept a loan modification offer within 14 days of the offer; or (3) the borrower accepts a loan modification offer, but defaults or breaches the terms.
- Single Point of Contact
A mortgage servicer is required to create a “single point of contact” for a borrower that has requested a foreclosure prevention alternative. The single point of contact may be an individual or a team that has the authority to perform specific responsibilities, has knowledge of a borrower’s situation and current status, provides accurate information to a borrower, and coordinates all documents associated with a borrower’s foreclosure prevention alternative.
- Loan Modification Review Process
A mortgage servicer is required to provide a borrower written acknowledgement of receipt within five business days of receiving a completed loan modification application or any documents connected to a loan modification application.
The initial written acknowledgement of receipt of the loan modification application must include a description of the loan modification process, including an estimate of when a decision will be made and length of time a borrower will have to consider an offer; any deadlines or expiration dates for submitting documents; and any deficiencies in the application.
- Loan Modification Application Denial and Appeal
If a loan modification application is denied, a mortgage servicer is required to send a borrower written notice identifying the reasons for denial, including (1) timing and instructions for requesting an appeal; (2) if applicable, reasons for investor disallowance of the loan modification; (3) information related to the net present value calculation, if the denial was based on this calculation; (4) if applicable, a finding of a prior failed loan modification; and (5) a description of other foreclosure prevention alternatives for which the borrower may be eligible.
A mortgage servicer must provide a borrower at least 30 days from the date of a written denial to appeal the denial and provide evidence that the mortgage servicer’s determination was in error.
- Review of Foreclosure Documents
Before commencing foreclosure, a mortgage servicer is required to review competent and reliable evidence to substantiate the borrower’s default and its right to foreclose. In addition, every recorded declaration, affidavit, NOD, NOS, assignment, and substitution of trustee must be accurate and complete, and supported by competent and reliable evidence.
A mortgage servicer is prohibited from recording a Notice of Default (NOD) or, if a NOD has already been recorded, recording a Notice of Sale (NOS) or conducting a trustee’s sale until the later of:
(1) 31 days after the borrower is provided written notice of the denial; (2) If the borrower appeals the denial, the later of 15 days after the denial of the appeal or
14 days after a loan modification is offered after appeal, but declined by the borrower; or (3) if a loan modification is offered after appeal and accepted, the date on which the borrower defaults or breaches the terms of the offer.
List of mortgage servicers licensed and regulated by the Department of Business Oversight with more than 175 Foreclosures in calendar year 2012 and are subject to these specific requirements:
- BAYVIEW LOAN SERVICING LLC
- CARRINGTON MORTGAGE SERVICES, LLC
- CITIMORTGAGE, INC.
- FIRST MORTGAGE CORPORATION
- GMAC MORTGAGE, LLC
- GREEN TREE SERVICING LLC
- GUILD MORTGAGE COMPANY
- HOMEWARD RESIDENTIAL, INC.
- OCWEN LOAN SERVICING, LLC
- NATIONSTAR MORTGAGE, LLC
- PENNYMAC LOAN SERVICES, LLC
- PHH MORTGAGE CORPORATION
- PROVIDENT FUNDING ASSOCIATES, L.P.
- RESIDENTIAL CREDIT SOLUTIONS, INC.
- SAXON MORTGAGE SERVICES, INC.
- SELECT PORTFOLIO SERVICING, INC.
- SETERUS, INC.
- SPECIALIZED LOAN SERVICING LLC
- SUNTRUST MORTGAGE, INC.
- VERICREST FINANCIAL, INC.