SACRAMENTO, CA (AP) - Democrats who control California's Legislature have come up with a new plan to regulate the state mortgage industry that gives homeowners more leverage against their lenders.
The draft legislation provided Friday to The Associated Press would bar banks from foreclosing on homes while loan modifications are pending, let homeowners sue mortgage providers who break state law and require lenders to provide a single point of contact to borrowers.
The plan to be considered next week is an extension of a national settlement that imposed new restrictions on the five largest U.S. banks.
Previous efforts to reform the California mortgage industry have stalled amid opposition from banks and other lenders, and Republicans and moderate Democrats who were concerned more sweeping restrictions might further stall the recovery of the state housing market.
The Associated Press