The foreclosure crisis of 2008-2011 hit California hard, as many once-thriving neighborhoods became ghost towns. In response, the California legislature passed the California Homeowner Bill of Rights, which took effect on January 1, 2013. This law imposes significant restrictions on the activities of mortgage lenders and servicers and is considered quite borrower-friendly.

The California Homeowner Bill of Rights was inspired by the National Mortgage Settlement of 2012. This was an agreement between 49 states and five banks – Ally/GMAC, Bank of America, Citi, JPMorgan Chase, and Wells Fargo – that provided extensive relief to borrowers from those banks. The California Homeowner Bill of Rights, by contrast, applies almost universally.


The following is a very incomplete list of some of the most important features of the California Homeowner Bill of Rights:

Suspension of Foreclosure During Loan Modification: Previously, a loan servicer could continue with foreclosure proceedings even while the borrower’s foreclosure alternative application was pending (this is known as “dual tracking”). This practice has now been forbidden in California. The application must be accepted or denied before a trustee’s foreclosure sale can be conducted.

The Anti-”Runaround” Provision: One of the easiest ways for a loan servicer to evade a borrower seeking alternatives to foreclosure was to keep switching him around to different people. Homeowners are now entitled to deal with a single contact representative.

Mandatory Consultations on Foreclosure Alternatives: Servicers are now required to attempt to contact a borrower about foreclosure alternatives before commencing foreclosure proceedings by issuing a notice of default. After the attempt at contact has been made, borrowers are entitled to a 30-day grace period.

Expanded RIght to Sue: Under certain circumstances, homeowners have the right to file a lawsuit against the lender or loan servicer for certain violations of the Homeowner Bill of Rights. Relief might include money damages or a court order restraining the action of the lender or loan servicer. If the violation is serious enough, the homeowner might be entitled to treble (triple) damages or up to $50,000 in liquidated damages (whichever is greater).

Eviction Restrictions: Tenants are also protected under the Homeowner Bill of Rights. Even with no fixed-term lease, tenants living in foreclosed homes have 90 days before eviction proceedings are initiated. Fixed term leases must be fully honored in most cases.


The California Homeowner Bill of Rights doesn’t apply to everyone. The following qualifications apply:

  • The loan must be a first mortgage on the property;

  • The property must be occupied by the owner (but note the tenant protection provisions above);

  • The property must be residential rather than commercial; and

  • The property must include no more than four units.  

Don’t Fiddle While Rome Burns

If you are anticipating problems with borrowers, you need to act quickly. Here at CKB Vienna, we are committed to the aggressive, proactive representation of our clients, and our lawyers handle a wide range of mortgage and banking issues. We serve clients throughout Upland, Fontana, Ontario, Chino Hills, Claremont,Rancho Cucamonga, including Alta Loma and Etiwanda. Telephone us at 909-980-1040 or contact us online to learn how we can help you solve your problem.