With the signing of the $25 billion foreclosure settlement done and over with, state officials are looking for ways to protect their citizens from future abuse of the foreclosure process. In California, for instance, the state legislature yesterday passed a pair of bills incorporating part of Attorney General Kamala Harris’s California Homeowner Bill of Rights — a legislative package comprised of six individual bills that would basically adopt all provisions of the national agreement and make them permanent to the state.
In her proposals, Harris goes a bit further than the national mortgage settlement, insisting that the legislation be applied to all lenders and all mortgages statewide, not just those originated by the nation’s top five banks that signed the national agreement.
While not going that far, other states are attempting in their own way to legislate away mortgage fraud — and thus robo-signing — within their individual states. Georgia and Colorado are recent examples.
Just a couple of weeks ago, the Colorado Supreme Court ruled in favor of the official language used in Initiative 84, dismissing the concerns of groups opposed to the proposed initiative, which requires lenders to prove their right to foreclose on a property before proceeding with the foreclosure process.
At present, lenders do not have to show actual proof that they own the rights to the mortgage before foreclosing in Colorado. Three days after the court’s decision, backers of the initiative changed tactics. Instead of putting it to a vote in November, they now want the state legislature to take up the issue and pass the bill. Whether the Coalition to End Unjust Foreclosures can win the fight legislatively is far from over.
In Georgia, House Bill 237 passed both the House and Senate and was signed by Gov. Nathan Deal on May 1, 2012. Under provisions of the bill, which took effect on July 1, the definition of the mortgage lending process is amended to include “the execution of deeds under power of sale that are required to be recorded…,” as well as “the execution of assignments that are required to be recorded…” Section two was also amended, giving the state Attorney General and county district attorneys greater enforcement power in the fight against mortgage fraud.
It seems like the states are trying to eliminate all the ills that caused the foreclosure crisis in one broad stroke of the legislative pen — particularly getting rid of the illegal practice of robo-signing, along with counteracting the judicial nightmare caused by the formation of Mortgage Electronic Registration Systems (MERS) by the nation’s largest banks (which has sidestepped the need for paying recordation fees at the local county level for thousands if not millions of mortgages over the years — a loss that is being harshly felt by cash-strapped county governments to this day).
Will these efforts accomplish their desired goals? Or will they just be chalked up as another good attempt that comes up short? We’d like to know what you think.
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