California SB 1137 (a.k.a. the Perata Mortgage Relief Bill) has been signed into law. The bill will require lenders to “begin contacting homeowners at least 30 days before issuing a notice of default,” gives residential tenants “more time to move out of foreclosed dwellings,” and “authorizes local governments to impose fines as high as $1,000 [per day] on lenders who do not maintain foreclosed properties.”
The new law “applies to loans made between January 1, 2003 and December 31, 2007.”
Unfortunately, we doubt the new law will have any meaningful impact on foreclosure rates throughout California other than to delay the inevitable. The only real impact we expect: making properties that have been foreclosed upon more palatable to the public.
∙ California SB 1137 — Perata Mortgage Relief Bill Fact Sheet (pdf) [ca.gov]
∙ Governor signs law to help homeowners keep their properties [SFGate]
when they say, “allows tenants more time to move out of foreclosed dwelling …” do they mean renters or just the mortgage holder?
What is “more time”?
What about recovering the thousands of dollars in a security deposit for the renters?
If I am a renter I want to be notified if the owner is about to receive an NOD too.
[Editor’s Note: “The bill increases the current notice required to be given to residential tenants of foreclosed properties to 60 days prior to eviction.”]
Could this $1000/day potential liability cause the banks to more quickly reduce prices on abandoned foreclosed properties? Which (although foreclosures are not comps for “real” houses) would possibly put further negative pressure on prices…
these change may also incent lenders to work more with mortgage holders to avoid foreclosure.
No biggy, just another 30 days of free rental to them. I don’t think the 30 days make any financial different for those foreclosure candidates.
“Could this $1000/day potential liability cause the banks to more quickly reduce prices on abandoned foreclosed properties? “
I’d guess that the intent of the fine is to discourage “absentee banks” from letting the lawns of foreclosed properties from going brown and thereby dragging down the quality of life and property values of the remaining residents. So the banks will have an incentive to hire landscapers and pay the utility bills to keep the properties looking good until occupied. Banks will pay the additional $200/month landscaper and utility carrying costs to avoid the $1000/day fine. Only those banks caught snoozing are going to be hit with the fine. Its a no brainer.
Not a big deal for SF as there isn’t too much maintenance required on the street facing facade. But if you’ve toured any of the exurbs of Stockton or Sacramento you’ll see a few brown lawns here and there. Depressing.
Every renter-occupied house in San Bruno (without an automatic watering system) has a sun-burned brown lawn / dirt patch in front of it. Sometimes with a car parked on it.
Crummy landscaping isn’t just for Stockton, you know…
Keeping lawns green in the exurbs of Stockton or Sacramento is a waste of water. Just mowing the lawn is all that’s necessary.