BY JIM MILLER
SACRAMENTO BUREAU
jmiller@pe.com

Published: 02 July 2012 03:34 PM

SACRAMENTO — State lawmakers passed landmark legislation meant to help homeowners facing foreclosure, over the objections of critics who said the measure would hamper the state’s fitful housing recovery while doing little to keep struggling borrowers in their homes.

The bill approved Monday, July 2, would make it more difficult for mortgage servicers to foreclose on homeowners trying to modify their loans. The legislation also would require lenders to create a single point of contact for borrowers. In addition, it would set penalties for “robo-signing” of foreclosure documents.

An estimated 700,000 people are in default in California, and hundreds of thousands more are at risk of defaulting, according to the attorney general’s office.

In a statement a few hours after Monday’s vote, Gov. Jerry Brown strongly suggested that he will sign the legislation, saying it “establishes important consumer protections that are long overdue.”

Inland Southern California has been hit hard by the housing meltdown. From 2008 through 2011, Riverside County had nearly 135,000 foreclosures; San Bernardino had 102,147. Many other homeowners in the area owe more on their mortgages than their homes are worth.

The measure, which emerged last week from a special conference committee, passed Monday largely along party lines. Assemblyman Kevin Jeffries, R-Lake Elsinore, was the only Republican to back the proposal.

The bill is the cornerstone of what Attorney General Kamala Harris and other supporters dub the Homeowner Bill of Rights. The legislation builds on this year’s $25 billion national settlement between major lenders and state prosecutors over banks’ mortgage and foreclosure abuses.

One piece of the state bill seeks to limit so-called dual-track foreclosures. Some borrowers have lost their homes to foreclosure while they were working to modify their loans.

Other borrowers have described getting the run-around when they called their lenders. The bill would require a single point of contact.

Other homeowners have found themselves facing foreclosure after automated systems erroneously signed foreclosure papers.

Harris said the bill could provide a remedy for homeowners facing foreclosure.

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