In the last three years the state of California, as well as the rest of our nation, has suffered from a prolonged real estate slump. In that time, more than one million were lost, in California alone to foreclosure.

California’s prolonged real estate slump has resulted in more than one million California homes were lost to foreclosure in the past three years alone. To bring this point home, I am talking not about homes simply in foreclosure or threatened by foreclosure, but lost through foreclosure.

While it is no doubt true that parts of the California real estate market are recovering, statewide there are an additional 700,000 properties currently in various stages of the foreclosure process.

As a result of such horrific statistics, on July 11, 2012, in order to stem the wave of foreclosure, California enacted into law a „Homeowner Bill of Rights“ for the purpose of aiding embattled homeowners.

One of the key provisions of the new law is the ban on „dual tracking,“ a practice whereby the lender on one hand proposes to give the borrower to a modification and at the same time, is foreclosing. As one might expect, this practice has the effect of lulling homeowners into a false sense of security.

The ban on dual tracking prohibits the recording of a notice of default, notice of trustee’s sale and the conducting of sale while a loan modification application is pending.

Another provision that is designed to cut down on the abuses rampant in the modification business is that under the new law mortgage servicers will be required to designate a „single point of contact“ for borrowers potentially eligible for a loan modification. The single point of contact will not only be responsible to coordinate the flow of documentation but will also be required to be knowledgeable about the borrower’s status and foreclosure prevention alternatives. How this latter provision will play out in the court’s is anybody’s guess.

The new law also establishes procedures to be followed in connection with a modification application on a loan secured by a first lien. There are also procedures that must be followed in connection with the denial of an application, and most importantly it provides for a borrower’s right to appeal a denial.

The enforcement provisions of the Bill of Rights authorize a borrower, who is forced to litigate with his/her lender, to seek an injunction and damages for violations of certain of the provisions described above. Under its provisions, for the first time in the state of California, a homeowner will be able to secure injunctive relief without having to cure arrears or post expensive bonds.

Besides injunctive relief, the new law authorizes the greater of treble actual damages or $50,000 in statutory damages if a violation of certain provisions of the law is found to be intentional, reckless or resulting from willful misconduct.

Other changes include changes to the notice provisions of Trustee’s Sales. Formerly, a Trustee’s Sale could be continued for as much as a year without written notice being provided to the borrower of the continued date. Under the new law, once foreclosure begins, if a Trustee’s Sale date is postponed, the new law requires that written notice be given to the borrower after the postponement in order to advise the borrower of any new sale date and time.

More information about California’s Homeowners Bill of Rights legislation can be found in: Civil Code 2920.5, 2923.4, 2923.5, 2924, 2923.6, 2923.7, 2923.55, 2924.9, 2924.10, 2924.11, 2924.12, 2924.15, 2924.17, 2924.18, 2924.19 and 2924.20

Want to find out more about the Homeowner’s Bill of Rights, then visit Mitchell Sussman’s site on how to navigate foreclosure.