California Assembly Approves Survivor's Rights Bill

The California State Assembly approved legislation Monday that would expand the rights of a deceased homeowner's surviving loved ones, including widows, widowers and other heirs.

SB 1150, also known as the Survivor Homeowner Bill of Rights, defines a mortgage servicer's responsibility in cases where a borrower dies and the surviving homeowner was not included on the loan. The bill, which is co-written by California State Sens. Mark Leno and Cathleen Galgiani, was approved by the State Senate in June.

Now, the bill will go back to the California State Senate for a concurrent vote. If that vote is successful, it will then go to Gov. Jerry Brown for his approval or veto.

The bill takes its inspiration from the California Homeowners Bill of Rights, which became law in 2013. SB 1150 works to prevent servicers from recording a default notice once they have been notified of the borrower's death until they meet certain requirements, including providing a successor with information about the loan no later than 10 days after determining who the successor is.

The bill was co-sponsored by the California Alliance of Retired Americans, Housing and Economic Rights Advocates and the California Reinvestment Coalition, and received backing from 50 organizations and California Attorney General Kamala Harris.

"The assembly approval of SB 1150 is an important step forward in California leading the nation when it comes to protecting homeowners from unscrupulous foreclosure practices," Maeve Elise Brown, executive director of Housing and Economic Rights Advocates, said in a news release Monday. "SB 1150 is a pragmatic way to stop widows, widowers and other heirs from needlessly losing their homes to foreclosure and we hope Gov. Brown signs it quickly."

A group of trade associations, including the California Mortgage Bankers Association, the California Mortgage Association and the Consumer Mortgage Coalition, sent a letter last week to the State Assembly to voice the opposition to the bill. In the letter, the group says that the bill could cause unnecessary litigation and that the state legislature should analyze the bill to compare it with existing Consumer Financial Protection Bureau regulations.

"Notwithstanding recent amendments, we must remain opposed to a measure whose central purpose is a private right of action with draconian penalties," the group wrote.

The letter also called for a January 2019 sunset date, arguing that "several mortgage and foreclosure reform measures enacted during the past years have included a sunset clause."

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