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Kamala Harris and the California Homeowner Bill of Rights


A few months ago, we reported on state Attorney General Kamala Harris’ championing of homeowner rights in California. She was very large in brokering the $25 billion dollar federal settlement with five big banks earlier this year–JP Morgan-Chase, Bank of America, CitiBank, Wells Fargo, and Ally–all of whom wanted to limit their exposure to suits for consumer fraud and abuse related to foreclosures.

Since then, the attorney general has continued her pursuit of justice and fair treatment for California homeowners. The latest is the California Legislature’s passage of two highly contentious bills a few days ago that promise some real protections for homeowners–SB 1470 and AB 2425. The former, prohibits banks from foreclosing on properties while the homeowner is applying for or negotiating a loan modification–called dual tracking–and the latter, requires that banks provide and maintain a single human contact point for every homeowner customer faced with mortgage difficulty, rather than giving that customer the run-around and little access to up-to-date information.

The twin issues now are getting Gov. Brown to sign the measures into state law, amid massive financial pressure from the state chambers of commerce and the state banking industry, all of whom have fiercely opposed the two bills; and even if signed, making sure the bills are enforced.

This is a very thick plot. The banking industry, according to their CEO’s recent letter to the editor of the Sacramento Bee, wants no regulation or, failing that, at least voluntary regulation. Neither has worked very well for California homeowners during this current fiscal crisis, nor in previous ones. Banks have violated rules with impunity, kicked even returning and decorated Iraqi-Afghanistan military veterans out of their homes, and fraudulently used robo-signings to forge contract signatures to evict people and sell their homes at auction. The banks cannot be trusted to play fair with underwater and delinquent homeowners without substantial governmental oversight and effective regulations.

The continuing quest by Harris and her California allies, like U.S. Housing Director Shaun Donovan and the Bay Area Consumers Union, to craft and get into law a California Homeowner Bill of Rights to provide that oversight is thus a major fight worth engaging in and winning.

The six-part series of bills, which includes the two mentioned above, are Senate-Assembly versions of SB 1472/AB 2314, which force banks to either pay fines or properly maintain foreclosed properties and not allow the properties to become blighted; SB 1473/AB 2610, which allows renters in property that gets foreclosed to be given 90 days to relocate; AB 1950, which requires foreclose agents and banks to pay a $25 notice of default fee at the start of formal proceedings and extends the statute of limitations on mortgage-related crimes; and SB 1464/AB 1763 (authored by sate Senator Loni Hancock and Assemblyman Mike Davis), which gives the attorney general the authority to call a grand jury into session to investigate special financial crimes inflicted on multiple homeowners in multijurisdictional situations. This enhanced authority will fit in well with the new Mortgage Fraud Strike Force the attorney general recently established in her office.

These remaining four components are expected to pass in June or July before the legislative summer recess. This will be a monumental legal achievement for consumer protection in California, and it is likely to become a model for activists in other states who need to push back against the wave of profiteering conservatism being imposed across the country.

The $25-billion federal deal with the banks expires in three years, and only applies to the banks that signed the document. The Homeowner Bill of Rights, once passed into law becomes permanent, codifies into law all of the reforms contained in that federal deal, and applies additional regulations to all firms that are involved in servicing mortgage loans in California.

Thus, Harris is following through to the next level to help her California constituents. So far, she is proving to be a super public servant.

How does all this help the Black community? The fact is, most Blacks living in California reside in rentals or duplex-leased units, rather than single family mortgaged homes. A recent newspaper report–the Minority News, June 26, 2012–said that Blacks comprise roughly 4.5 percent of homeownership in California, and even with that the Bureau of the Census said that overall Black home ownership in the USA and California declined significantly, from 45.2 percent to 44.3 percent.

This decreased Black median wealth in America by at least one half. Just as significantly, according to reports from the Consumer Financial Protection Bureau, California Black and Latino homeowners made up almost 50 percent of foreclosures during the last three years, while representing less than 30 percent combined of California homeowners. Latinos and Asians are fast becoming the largest California homeowners.

The California Homeowner Bill of Rights, then, is an equal opportunity thrust for fair and balanced treatment. Blacks, Latinos, Asians, and Whites will all be helped by this omnibus legislation.

It seems we got the right one this time, people, in state Attorney General Harris. Rock on wid yore bad self! Let your cape flow!

Professor David L. Horne is founder and executive director of PAPPEI, the Pan African Public Policy and Ethical Institute, which is a new 501(c)(3) pending community-based organization or non-governmental organization (NGO). It is the stepparent organization for the California Black Think Tank which still operates and which meets every fourth Friday.

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