Bill > AB1602

This bill, concerning mortgages and deeds of trust, aims to strengthen borrower protections during the foreclosure process by introducing new requirements for lenders and trustees. Key provisions include mandating that lenders make direct contact with borrowers to discuss their financial situation and explore foreclosure alternatives before filing a notice of default, which is the initial step in foreclosure. The bill also requires lenders to provide borrowers with specific information about loan modification options, deadlines for applications, and contact details for housing counseling agencies, including the newly established Office of Homeowner Protection. Furthermore, it introduces stricter rules regarding the timing and process of foreclosure sales, particularly when a borrower applies for a loan modification, preventing lenders from proceeding with a sale while an application is pending or if a borrower accepts a modification. The bill also outlines procedures for appealing loan modification denials and establishes penalties for violations, including the possibility of enjoining a sale or recovering damages, while also creating an affirmative defense for entities complying with certain national mortgage settlement agreements.