California Legislature Weighs Mandatory Mediation Program

In the California Assembly, most of the action surrounds AB 1639, UTA’s California Lobbyist, Mike Belote reports. “As currently written, this bill would provide borrowers with the right to request a mandatory mediation program prior to foreclosure, similar to AB 149 in operation in Nevada. Applicable to owner-occupied property subject to a recorded notice of default, the bill would prohibit taking any action with respect to the power of sale until the “Mediated Mortgage Workout” program was completed.”

UTA testified at length about the enormous difficulties involved in implementing a Nevada-style mediation law in California. In the Senate, a different concept is being considered in SB 1275. Rather than create a mediation law, SB 1275 basically amounts to an enhanced version of SB 1137, with far more requirements to make borrowers aware of possible opportunities to modify loans. HAMP-participating lenders would be required by state law to conform to HAMP duties, and similar obligations would be placed on non-HAMP lenders.

Two other bills remain alive on the subject of anti-deficiency protections.

Read the full story