Consumer Protection

SACRAMENTO -- Attorney General Kamala D. Harris today announced that the final parts of the California Homeowner Bill of Rights have passed out of both legislative houses and have been sent to the Governor’s desk.

“The entire Homeowner Bill of Rights legislative package will ensure fair lending and borrowing practices for California homeowners,” said Attorney General Harris. “California has been the epicenter of the foreclosure crisis and this package of legislation will help affected homeowners, tenants and neighborhoods.”

Senate Bill 1474 by Senator Loni Hancock, D-Berkeley, gives the Attorney General’s office the ability to use a statewide grand jury to investigate and indict the perpetrators of financial crimes involving victims in multiple counties.

Assembly Bill 1950, by Assemblymember Mike Davis, D-Los Angeles, extends the statute of limitations for prosecuting mortgage related crimes from one year to three years, giving the Department of Justice the ability to investigate and prosecute complex mortgage fraud crimes.

On Governor Brown’s desk is Assembly Bill 2610 by Assemblymember Nancy Skinner, D-Berkeley, which will require purchasers of foreclosed homes to give tenants at least 90 days before starting eviction proceedings. If the tenant has a fixed-term lease, the new owner must honor the lease unless the owner demonstrates that certain exceptions intended to prevent fraudulent leases apply.

Already signed into law is Assembly Bill 2314 Assemblymember Wilmer Carter, D-Rialto, which provide additional tools to local governments and receivers to fight blight caused by multiple vacant homes in neighborhoods.

In June, two key parts of the Homeowner Bill of Rights passed out of both houses of the Legislature and were signed by Governor Jerry Brown. Those bills, which came out of a two-house conference committee, provide protections for borrowers and struggling homeowners, including a restriction on dual-track foreclosures, where a lender forecloses on a borrower despite being in discussions over a loan modification to save the home. The bills also guarantee struggling homeowners a single point of contact at their lender with knowledge of their loan and direct access to decision makers.

All aspects of the California Homeowner Bill of Rights will take effect on January 1, 2013 once signed into law.

SACRAMENTO -- Attorney General Kamala D. Harris today announced a $323.67 million settlement with a Los Angeles-based health maintenance organization over excess Medi-Cal and Medicare payments.

The settlement with SCAN Health Plan, Senior Care Action Network, and Scan Group (collectively known as SCAN), which provides health care and support services in Southern California to the elderly and disabled, constitutes the largest Medi-Cal recovery in the state’s history.

“Californians have lost millions of dollars that should have been going toward the health care of our most vulnerable citizens,” said Attorney General Harris. “This settlement will bring a significant amount of those funds back to the state when it is dearly needed, and I commend all of those involved in this action.”

The matter was initially investigated by the State Controller's Office.  The state Attorney General’s Bureau

of Medi-Cal Fraud and Elder Abuse then commenced its own investigation in cooperation with the United

States Attorney’s Office in Los Angeles. The investigation was conducted with the assistance of the California Department of Health Care Services (DHCS), which administers the Medi-Cal program.

A small component of the settlement resolves certain federal Medicare allegations brought by James M. Swoben in a lawsuit filed in July 2009 in federal court in the Central District of California. Mr. Swoben is a former employee of SCAN.  The lawsuit was filed pursuant to the federal and state False Claims Acts, which provide that any person with information about a false claim can file a sealed lawsuit on behalf of the government to recover the government’s losses.

The federal government will be receiving $3.82 million for the Medicare portion of the settlement. For the Medi-Cal portion of the settlement, $319.85 million will be split between the federal government and California, with the federal government receiving $129.38 million and the state $190.47 million. 

The settlement resolves the state’s allegations that SCAN failed to provide contractually required financial information to DHCS, thereby impairing the department from revising capitation rates for SCAN.

“This settlement is a victory for the Medi-Cal beneficiaries we serve,” said DHCS Director Toby Douglas.

“Using the scarce resources available in the most efficient way possible is a top priority for the state. We will continue our ongoing efforts to strengthen programs that protect the integrity of Medi-Cal.”

A copy of the Third Amended Complaint and copies of the settlement agreement; Joint Notice of Election to Intervene in Part; and the Notice of Dismissal and Order Thereon are attached to the online version of this release at www.oag.ca.gov.

SAN FRANCISCO --- Attorney General Kamala D. Harris today warned Californians about potential scams targeting young immigrants seeking to participate in the federal government’s recently launched Consideration of Deferred Action for Childhood Arrivals program.

Beginning today, certain young immigrants who were brought to United States as children and meet several key guidelines may request consideration of deferred action for a period of two years, subject to renewal, and, as a result, may be eligible for work authorization. To learn more about the Consideration of Deferred Action for Childhood Arrivals program, please visit the U.S. Citizenship and Immigration Services’ website: http://www.uscis.gov.

While the California Attorney General’s Office has not yet received any citizen complaints of scams directly related to this new program, immigrants are often the target of consumer scams and should be vigilant in seeking assistance related to the Consideration of Deferred Action for Childhood Arrivals program.

To combat the threat of scams, Attorney General Harris has provided the following information and tips as eligible immigrants begin to apply for consideration:

If you are seeking help from an attorney:

• Is the person offering legal services a lawyer licensed by the State Bar of California? You can check out an attorney online at http://www.calbar.ca.gov/ or by calling 1-800-843-9053.

• If you cannot afford a private attorney, the Board of Immigration Appeals provides a list of attorneys who provide immigration services either for free or for very little cost. This list is available online at http://www.justice.gov/eoir/probono/states.htm. You can also contact your local legal aid office. For a referral, visit www.lsc.gov and click on the Find Legal Assistance tab.

If you are seeking help from an immigration consultant:

• Immigration consultants are required to register with the California Secretary of State’s Office, and to post a $50,000 bond. You can check out an Immigration Consultant online at http://www.sos.ca.gov/business/sf/bond_search/ or by calling 1-916-653-3984.

• It is against the law for an immigration consultant to give legal advice. An immigration consultant can only give you non-legal help, such as translating your answers to questions on U.S. Citizenship and Immigration Services forms.

• Get a written contract signed and dated by the immigration consultant. Make sure the contract lists the full name and contact information for the immigration consultant, the services you were promised and how much you have agreed to pay. The contract must be written in both English and your language. You have the right to cancel the contract within 72 hours of signing the contract. You must cancel the contract in writing. Give only copies of original documents to the immigration consultant; keep your originals in a safe place.

If you have a complaint against an Immigration Consultant, please contact the California Attorney General’s Office. You can file a complaint online at https://oag.ca.gov/contact/consumer-complaint-against-business-or-company or by mailing your complaint to Office of the Attorney General, Public Inquiry Unit, P.O. Box 944255, Sacramento, CA 94244-2550.

RIVERSIDE -- Attorney General Kamala D. Harris yesterday filed a civil lawsuit seeking the removal of officers and directors of Help Hospitalized Veterans, a California charity. The complaint alleges that those running the organization engaged in self-dealing, paid excessive executive compensation and engaged in fraudulent fundraising and other unlawful activities.

The lawsuit also seeks to recover more than $4.3 million in funds improperly diverted from Help Hospitalized Veterans. Those funds were meant to support several programs serving veterans and active-duty military, including providing arts and craft kits to hospitalized veterans. Instead, they were used to enrich the organization’s officers and fundraisers.

“The officers of Help Hospitalized Veterans improperly diverted money that hard-working and patriotic Americans donated to support injured vets,” said Attorney General Kamala D. Harris.  “We must protect veterans, active-duty military and donors from scam artists who see them as little more than prey for their financial frauds.”

The lawsuit alleges that the directors and officers of Help Hospitalized Veterans breached their fiduciary duty by wasting its charitable assets on such things as golf memberships and a condominium (for use by officers), and authorizing excessive executive compensation to the group’s former President (Roger Chapin) and its current President (Michael Lynch). 

The suit alleges Chapin received more than $2.3 million in excessive compensation during the final seven years of his tenure and excessive compensation to Lynch totaled over $900,000.  Chapin is additionally charged with self-dealing as a result of substantial diversions of the charity’s funds to entities in which he had a financial interest. Those diversions include loans Help Hospitalized Veterans made to a firm called American Target Advertising, which was making substantial payments to Chapin. American Target Advertising is a for-profit business (founded by Chapin’s close friend Richard Viguerie) that directs Help Hospitalized Veterans’ vast direct-mail fundraising operation.

The lawsuit further alleges that the nonprofit used increasingly-common accounting gimmicks to inflate the amount of income purportedly spent on providing veterans’ services while artificially minimizing the amount reportedly spent on fundraising. For example, Help Hospitalized Veterans’ use of one of these gimmicks resulted in decreasing its reported fundraising costs from 65 percent of total costs to less than 30 percent. As a result, the filings to both the IRS and the Attorney General’s office were substantially false. Donors and charity watchdog groups rely on both of those reported expenditure categories in evaluating a charity’s efficiency. 

Controversy around the performance of veteran’s charities like Help Hospitalized Veterans was brought to the public’s attention in 2007 by Rep. Henry A. Waxman who, as Chairman of the House Oversight and Government Reform Committee Hearings, held hearings into their fundraising practices and overhead.   

The lawsuit seeks general and punitive damages, restitution, civil penalties and the removal of those officers and directors named in the lawsuit.

Named defendants in the lawsuit include: Help Hospitalized Veterans; its former president Roger Chapin (California); former employee Elizabeth Chapin (California); current president Michael Lynch (California); the following officers or directors of the charity: Robert Beckley, Jr. (Arizona), Thomas Arnold (Florida), Leonard Rogers (Florida), and Gorham Black (Florida); accountant Robert Frank and the company Frank & Company, PC (Virginia); and direct-mail professional fundraiser Creative Direct Response, Inc. (Maryland).

The Complaint alleges seven causes of action:  (1) breach of fiduciary duty (against Help Hospitalized Veterans directors and officers); (2) aiding and abetting a breach of fiduciary duty (against Frank and Frank & Co.); (3) engaging in self-dealing transactions in violation of Corporations Code section 5233 (against Chapin); (4) excessive executive compensation in violation of Corporations Code section 5235 (against Chapin and Lynch); (5) wrongful acquisition of property/unjust enrichment (against Chapin and his wife Elizabeth); (6) misrepresentations in solicitations to donors in violation of Government Code section 12599.6 (against Help Hospitalized Veterans, its directors and officers, and Creative Direct Response); and (7) unfair business practices (against all defendants other than Elizabeth Chapin and Creative Direct Response).

More than 2 million of the nation’s 22 million veterans live in California, the highest number for any state. Protecting these veterans, and active-duty military, from financial scams has been a priority for Attorney General Harris. This focus resulted from a survey of veterans who work in the Department of Justice that was undertaken to inform Department efforts on the matter.  Attorney General Harris and Holly Petraeus of the Consumer Financial Protection Bureau recently spoke at Travis Air Force Base to warn of financial scams that target military members.

LOS ANGELES -- Attorney General Kamala D. Harris today announced defendants who ran a national loan modification scam were ordered to pay more than $4 million in penalties and restitution, including $2 million to consumers who were falsely promised modifications of their mortgage loans.

More than 1,000 customers paid more than $2 million for loan modification services to Statewide Financial Group, Inc., which did business as US Homeowners Assistance and Webeatallrates.com, and was based in Orange County. In July 2009, the Attorney General’s office shut down the business, which had been in operation since January 2008.

“These defendants took advantage of vulnerable people in extremely difficult circumstances, including many who faced imminent loss of their homes,” said Attorney General Harris. “The significant financial penalties imposed by the court let scammers know that severe consequences will flow to those who defraud California consumers.”

The Orange County Superior Court ordered that every US Homeowners Assistance loan modification customer should receive a full refund upon request.  The defendants were also permanently enjoined from engaging in the conduct that led to the lawsuit and were ordered to pay $2 million in civil penalties.  It is unclear, however, how much money will be recovered and available to pay refunds or penalties.

The prosecution of this action took nearly three years, culminating in a multi-week bench trial in March 2012. The business’ owners, Zulmai Nazarzai and Hakimullah Sarpas and Fasela Sheren (who went by the name Sharon Fasela), were all found liable for violating California’s Unfair Competition Law and False Advertising Law.

In a separate proceeding in late 2010, Attorney General Harris successfully prosecuted Nazarzai for contempt of court for his refusal to turn over $360,000 unlawfully taken by defendants as ordered by the court. He has been incarcerated in the Orange County jail since December 2010 because of his continued refusal to comply with the court’s order.

Attorney General Harris formed the Mortgage Fraud Strike Force in May 2011 to investigate and prosecute crimes and wrong-doing related to mortgages, foreclosures, and real estate. The prosecution of this action is part of Attorney General Harris’ ongoing efforts to protect homeowners, which also includes the national mortgage settlement and the California Homeowner Bill of Rights.

Copies of the court’s judgment and statement of decision are attached to the online version of this release at www.oag.ca.gov.

SAN FRANCISCO - Attorney General Kamala D. Harris today announced that her office, along with the offices of seven other attorneys general, has reached settlements totaling $571 million with three manufacturers that engaged in price fixing of flat screen LCD (Liquid Crystal Display) panels found in monitors, laptops and televisions. 

The settlements announced today apply to Toshiba Corp.; LG Display Co., Ltd.; and AU Optronics Corporation (and several subsidiaries), which have collectively agreed to pay $543.5 million toward damages claims, plus $27.5 million in civil penalties.  This follows $538.5 million in settlements reached in December 2011 with seven leading LCD manufacturers, plus $14.7 million in civil penalties, bringing the total recovery to more than $1.1 billion, which will be divided among twenty-four states and the District of Columbia.

 “The price-fixing by these ten companies broke the law and short-changed California consumers,” said Attorney General Harris.  “This settlement brings justice to our consumers, protects companies that follow the law, and ends the pernicious practice of price-fixing by these manufacturers.”

In October 2010, the Attorney General's office filed a lawsuit against ten companies for engaging in price fixing of LCD panels from 1999 to 2006 that resulted in higher prices for California residents and businesses, as well as government agencies.

As part of the settlements, the ten companies that engaged in price fixing will provide a fund for injured consumers and businesses. The settling companies have also resolved claims brought by Attorney General Harris for civil penalties under California’s Unfair Competition Law, as well as restitution for government agencies that purchased products containing the flat screen LCD panels.

Attorney General Harris is joined in these settlements by the attorneys general of Arkansas, Florida, Michigan, Missouri, New York, West Virginia and Wisconsin, as well as a class action brought on behalf of private claimants in the United States District Court for the Northern District of California.

The three defendants who settled today join the seven who settled in December, which included Chimei Innolux Corp., Chi Mei Optoelectronics USA, Inc., Chi Mei Optoelectronics Japan Co., Ltd, HannStar Display Corporation, Hitachi, Ltd., Hitachi Displays, Ltd., Hitachi Electronic Devices, USA, Inc., Samsung Electronics, Co., Ltd., Samsung Electronics America, Inc., Samsung Semiconductor, Inc., Sharp Corporation, and Sharp Electronics Corporation.

The Attorney General’s case was originally filed in San Francisco Superior Court.

In 2008, two companies – LG Display Co., Ltd. and LG Display America, Inc. – pleaded guilty to federal charges for price fixing TFT-LCD panels and paid $400 million in federal fines. Defendants AU Optronics Corporation and AU Optronics Corporation America, along with several employees, were convicted on federal charges of price fixing in March 2012 in the United States District Court for the Northern District of California.

California consumers and government entities will receive a significant portion of the more than $1 billion settlements, with an exact percentage to be determined in coming months. Following completion of the litigation, California consumers and businesses can file claims for monetary relief. Information about how to file a claim will be available at the Attorney General's website or at www.lcdclass.com.

LOS ANGELES -- Attorney General Kamala D. Harris announced that the Homeowner Bill of Rights, which will protect homeowners and borrowers during the mortgage and foreclosure process, was signed into law today by Governor Edmund G. Brown Jr.

The Homeowner Bill of Rights prohibits a series of inherently unfair bank practices that have needlessly forced thousands of Californians into foreclosure. The law restricts dual-track foreclosures, where a lender forecloses on a borrower despite being in discussions over a loan modification to save the home. It also guarantees struggling homeowners a single point of contact at their lender with knowledge of their loan and direct access to decision makers, and imposes civil penalties on fraudulently signed mortgage documents.  In addition, homeowners may require loan servicers to document their right to foreclose.

The laws will go into effect on January 1, 2013, and borrowers can access courts to enforce their rights under this legislation.

The Homeowner Bill of Rights builds upon and extends reforms first negotiated in the recent national mortgage settlement between 49 states and leading lenders. Attorney General Harris secured up to $18 billion for California homeowners in that agreement, and has also built a Mortgage Fraud Strike Force to investigate crime and fraud associated with mortgages and foreclosures.

“The California Homeowner Bill of Rights will give struggling homeowners a fighting shot to keep their home,” said Attorney General Harris. “This legislation will make the mortgage and foreclosure process more fair and transparent, which will benefit homeowners, their community, and the housing market as a whole.”

“Californians should not have to suffer the abusive tactics of those who would push foreclosure behind the back of an unsuspecting homeowner,” said Governor Brown. “These new rules make the foreclosure process more transparent so that loan servicers cannot promise one thing while doing the exact opposite.”

The Homeowner Bill of Rights consists of a series of related bills, including two identical bills that were passed on July 2 by the state Senate and Assembly: AB 278 (Eng, Feuer, Pérez, Mitchell) and SB 900 (Leno, Evans, Corbett, DeSaulnier, Pavley, Steinberg).

The California Homeowner Bill of Rights also contains a variety of bills outside of the conference committee process. These will enhance law enforcement responses to mortgage and foreclosure-related crime, in part by empowering the Attorney General to call a grand jury in response to financial crimes spanning multiple jurisdictions. Additional elements will help communities fight blight related to foreclosure, and provide enhanced protections for tenants in foreclosed homes. Please see the attached fact sheet for the status of these bills.

The California Homeowner Bill of Rights was introduced February 29, 2012 at a press conference featuring Assembly Speaker John A. Pérez and Senate President pro Tem Darrell Steinberg and bill authors from the Assembly and Senate.

More details about the California Homeowner Bill of Rights are found on the attached fact sheet. To learn more about how the bills impact California homeowners, review the slideshow at: www.oag.ca.gov.

SACRAMENTO -- Attorney General Kamala D. Harris today announced that the non-conference committee components of the California Homeowner Bill of Rights have passed out of legislative committees.

“The entire Homeowner Bill of Rights legislative package will create a level playing field for California homeowners,” said Attorney General Harris. “In addition, it will allow my office to continue to prosecute those who take advantage of homeowners who are desperate to stay in their houses.”

Assembly Bill 1950, authored by Assemblymember Mike Davis (D-Los Angeles), passed out of the Senate Judiciary today. The bill extends the statute of limitations for prosecuting mortgage related crimes from one year to three years, giving the Department of Justice ample time to investigate and prosecute mortgage fraud crimes.

Two bills to provide additional protections to tenants who rent homes that are foreclosed upon also passed out of the Senate Judiciary and Assembly Judiciary Committees today.

Assembly Bill 2610 (Assemblymember Nancy Skinner, D-Berkeley) and Senate Bill 1473 (Senator Loni Hancock, D-Berkeley), will require purchasers of foreclosed homes to give tenants at least 90 days before starting eviction proceedings. If the tenant has a fixed-term lease, the new owner must honor the lease unless the owner demonstrates that certain exceptions intended to prevent fraudulent leases apply.

Also passing out of the Judiciary Committees were Assembly Bill 2314 (Assemblymember Wilmer Carter, D-Rialto) and Senate Bill 1472 (Senator Fran Pavley, D-Agoura Hills), which provide additional tools to local governments and receivers to fight blight caused by multiple vacant homes in neighborhoods.

The final component in the California Homeowner Bill of Rights, AB 1763 (Assemblymember Mike Davis, D-Los Angeles) and Senate Bill 1474 (Senator Loni Hancock, D-Berkeley), gives Attorney General Harris the ability to convene a special grand jury to investigate and indict the perpetrators of financial crimes involving victims in multiple counties. AB 1763 and SB 1474 passed out of the Senate Public Safety and Assembly Public Safety, respectively.

Two key parts of the Homeowner Bill of Rights passed Monday out of both houses of the Legislature and sent to Governor Jerry Brown. Those bills, which came out of a two-house conference committee, provide protections for borrowers and struggling homeowners, including a restriction on dual-track foreclosures, where a lender forecloses on a borrower despite being in discussions over a loan modification to save the home. The bills also guarantee struggling homeowners a single point of contact at their lender with knowledge of their loan and direct access to decision makers.

The California Homeowner Bill of Rights extends Attorney General Harris’ response to the state’s foreclosure and mortgage crisis. Attorney General Harris created a Mortgage Fraud Strike Force in March, 2011 to investigate and prosecute misconduct related to mortgages and foreclosures. In February 2012 Attorney General Harris extracted a commitment from the nation’s five largest banks to dedicate an estimated $18 billion to mitigate financial harm to California borrowers caused by bank misconduct in the foreclosure process.

For more information on the California Homeowner Bill of Rights, go to www.oag.ca.gov

SACRAMENTO -- Attorney General Kamala D. Harris announced the California Homeowner Bill of Rights is one step closer to becoming law after key provisions passed the California Legislature today. The bills, which provide first of their kind protections for homeowners and reforms to the mortgage and foreclosure process, will now be sent to the desk of Governor Jerry Brown for consideration. The bills were approved 53 to 25 in the Assembly and 25 to 13 in the Senate.

“Passing these key elements of Homeowner Bill of Rights represents a significant step forward for struggling homeowners,” said Attorney General Harris. “These common-sense reforms will require banks to treat California homeowners more fairly and bring more transparency and accountability to their practices in our state. Responsible homeowners will have a better shot to keep their homes.”

“Californians will finally have a fighting chance to keep their homes, as this measure brings fairness to the loan modification and foreclosure process,” said Senate President pro Tem Darrell Steinberg. “At the same time, the protection gained by homeowners will help stabilize the housing sector of our economy. I applaud my colleagues for their hard work to protect consumers through this reasoned compromise.”

“The package approved by the Legislature today is a major victory for California’s consumers,” said Assembly Speaker John A. Pérez. “We impose tough new regulations on banks and lenders to stop the abusive practices we’ve seen since the collapse of the housing market, and this package will bring relief to hundreds of thousands of California homeowners.”

The California Homeowner Bill of Rights consists of a series of related bills, including two that were passed on June 26 by a two-house conference committee: AB 278 (Eng, Feuer, Pérez, Mitchell) and SB 900 (Leno, Evans, Corbett, DeSaulnier, Pavley, Steinberg). 

The two identical bills passed by the conference committee contain key elements of the legislative package and provide protections for borrowers and struggling homeowners, including a restriction on dual-track foreclosures, where a lender forecloses on a borrower despite being in discussions over a loan modification to save the home. The bills also guarantee struggling homeowners a single point of contact at their lender with knowledge of their loan and direct access to decision makers. For the first time, the Homeowner Bill of Rights imposes civil penalties, of up to $7,500, on the repeated filing of foreclosure documents without verifying their accuracy, a practice commonly known as “robo-signing.” In addition, homeowners may require loan servicers to document their right to foreclose.

Homeowners will also have a clearly-defined right to access the courts to protect themselves from violations of these protections.

The Homeowner Bill of Rights also consists of four bills outside of the conference committee process.  These will enhance law enforcement responses to mortgage and foreclosure-related crime, in part by empowering the Attorney General to call a grand jury in response to financial crimes spanning multiple jurisdictions. Additional elements will help communities fight blight related to foreclosure, and the crime that results, and provide enhanced protections for tenants in foreclosed homes. Please see the attached fact sheet for the status of these bills.

The California Homeowner Bill of Rights was introduced February 29, 2012 at a press conference featuring Assembly Speaker John A. Pérez and Senate President pro Tem Darrell Steinberg and bill authors from the Assembly and Senate. The Homeowner Bill of Rights codifies many of the core protections from the recent national mortgage settlement.

The California Homeowner Bill of Rights extends Attorney General Harris’ response to the state’s foreclosure and mortgage crisis. Attorney General Harris created a Mortgage Fraud Strike Force in March, 2011 to investigate and prosecute misconduct related to mortgages and foreclosures. In February 2012 Attorney General Harris extracted a commitment from the nation’s five largest banks to dedicate an estimated $18 billion to mitigate financial harm to California borrowers caused by bank misconduct in the foreclosure process.

More details about the California Homeowner Bill of Rights are found on the attached fact sheet. To learn more about how the bills impact California homeowners, review the slideshow at: www.oag.ca.gov.

SACRAMENTO -- Attorney General Kamala D. Harris today announced the passage of two central elements of the California Homeowner Bill of Rights through a special two-house conference committee. The 4 to 1 vote sends the bills to an expected vote next week in both the Assembly and Senate.

The two bills approved by the conference committee are the Foreclosure Reduction Act, which restricts the process of “dual-tracked” foreclosures and the Due Process Rights Act, which guarantees a reliable contact for struggling homeowners to discuss their loan with and which for the first time imposes civil penalties on the practice of fraudulently signing foreclosure documents without verifying their accuracy, a practice commonly known as “robo-signing.” The proposed legislation also includes meaningful enforcement for borrowers whose rights are violated.

The full Homeowner Bill of Rights includes additional provisions to reduce blight, ensure appropriate law enforcement response to mortgage fraud and crime, and protect tenants.  The bills containing these protections are also advancing through the Legislature.

“I am gratified by this vote, which represents one more step toward our goal of achieving a Homeowner Bill of Rights for California,” said Attorney General Harris. “The mortgage and foreclosure crisis in our state demands urgent efforts to help Californians keep their homes. The legislature will now have the opportunity to cast a vote on behalf of California’s struggling homeowners.”

The California Homeowner Bill of Rights was introduced February 29, 2012 at a press conference featuring Assembly Speaker John A. Perez and Senate President pro Tem Darrell Steinberg and bill authors from the Assembly and Senate. The goal of the Homeowner Bill of Rights is to take many of the mortgage reforms extracted from banks in a national mortgage settlement and write them into California law so they could apply to all mortgage-holders in the state.

“The mortgage and foreclosure abuse in California ends here,” said Noreen Evans (D-Santa Rosa), co-chair of the Joint Conference Committee. “This committee has passed historic legislation that codifies the
protections eligible homeowners deserve, while helping to stabilize the foreclosure crisis that has thwarted California’s economic recovery. The Legislature has studied, listened and engaged Californians and
industry to find a solution that is fair and effective to mitigate this crisis. I look forward to the full support of the Legislature and Governor in implementing this package.”

“This bill is the result of a long and difficult process in which we received input from all interested parties; including homeowners and the banks and found that foreclosures benefit no one,” said Assemblymember Mike Eng (D-Alhambra). “We ended such dubious practices as having a bank foreclose while a homeowner is in the process of modifying a loan and cut through confusion by making sure that there is a ‘single point of contact’ with mortgage servicers.  With half a million California homes at risk of foreclosure, this action was urgently needed.”

The California Homeowner Bill of Rights extends Attorney General Harris’ response to the state’s foreclosure and mortgage crisis. Attorney General Harris created a Mortgage Fraud Strike Force in March, 2011 to investigate and prosecute misconduct related to mortgages and foreclosures. In February 2012 Attorney General Harris extracted a commitment from the nation’s five largest banks of an estimated $18 billion for California borrowers.

More details about the California Homeowner Bill of Rights are found on the attached fact sheet.  To learn more about how the bills impact California homeowners, review the slideshow at: www.oag.ca.gov.