Consumer advocates say widows and widowers nationwide are falling into a bureaucratic black hole.
Although servicers will generally accept their loan payments, surviving homeowners who are not on the mortgage face significant resistance when they seek loan modifications once they’ve fallen behind on payments — often because they’ve lost their spouse’s income.
“They are being told they can’t do anything to prevent foreclosure,” said Charles Evans, an attorney with pro bono law firm Public Counsel, which is assisting Sequeira.
The problem is growing, advocates say, and has caught the attention of federal regulators and state lawmakers.
In just the first three months of this year, the Housing and Economic Rights Advocates, a statewide advocacy group, had handled 16 such cases.
In a 2013 survey, conducted by the California Reinvestment Coalition, 44% of housing counselors said that servicers “always” or “almost always” declined to discuss loan modifications with widowed clients when they weren’t on the loan. Last year, housing counselors across the country surveyed by the National Housing Resource Center gave servicers a poor rating for communication with widows, widowers and others in similar circumstances.
The Consumer Financial Protection Bureau is preparing to release regulations this summer that will assist widows and other so-called successors-in-interest. And the state Senate Judiciary Committee is set to vote Tuesday on a bill designed to give surviving spouses, domestic partners and children the same protections borrowers have in the Homeowner Bill of Rights, including the right to sue to stop a foreclosure or for economic damages after one occurs.
The bill, SB-1150, by Sen. Mark Leno (D-San Francisco) and Sen. Cathleen Galgiani (D-Stockton), would prevent servicers from moving forward with a foreclosure before requesting “reasonable” documentation of the borrower’s death and the identity of the survivor.
Dual tracking would be barred and servicers would be required to give accurate information about mortgage assumptions and foreclosure-prevention programs, while appointing a single point of contact for survivors.
Although the bill doesn’t require a modification be given — applicants must be able to show they can afford even the smaller loan payment — the intent is to give survivors a fair shot at getting one. It would, for example, allow delinquent survivors to get a loan modification without first getting current on payments.
The Consumer Financial Protection Bureau is preparing to release regulations this summer that will assist widows and other so-called successors-in-interest. And the state Senate Judiciary Committee is set to vote Tuesday on a bill designed to give surviving spouses, domestic partners and children the same protections borrowers have in the Homeowner Bill of Rights, including the right to sue to stop a foreclosure or for economic damages after one occurs.
The bill, SB-1150, by Sen. Mark Leno (D-San Francisco) and Sen. Cathleen Galgiani (D-Stockton), would prevent servicers from moving forward with a foreclosure before requesting “reasonable” documentation of the borrower’s death and the identity of the survivor.
Dual tracking would be barred and servicers would be required to give accurate information about mortgage assumptions and foreclosure-prevention programs, while appointing a single point of contact for survivors.
Although the bill doesn’t require a modification be given — applicants must be able to show they can afford even the smaller loan payment — the intent is to give survivors a fair shot at getting one. It would, for example, allow delinquent survivors to get a loan modification without first getting current on payments.
read more: http://www.latimes.com/business/realestate/la-fi-widow-foreclosures-20160503-story.html
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