New California Bill Clarifies that Widows are also Protected by California Homeowner Bill of Rights 2015

Small Fix Would Help Grieving Homeowners in Working with Mortgage Servicers

February 9, 2015- Sacramento: Assemblymember Susan Talamantes Eggman has introduced AB 244, legislation that would strengthen the California Homeowner Bill of Rights (HBOR) by clarifying that widowed homeowners and other heirs who have legal interest in a home after a loved one passes away enjoy the same legal protections afforded to homeowners. HBOR was passed in January 2013, and has been widely credited with evening the playing field between individual homeowners and their mortgage servicers. Similar laws have also been enacted in Minnesota and Nevada.

Unfortunately, in some cases, a deceased family member may have been the only person listed on the mortgage, and mortgage servicers have argued that the protections for homeowners created by HBOR do not extend to widowed homeowners and other surviving heirs who have a legal interest in the home. As a result, these grieving family members face unreasonable obstacles, delays, and overly burdensome red-tape when trying to speak with the bank or servicer about the mortgage.

AB 244 would address this problem by clarifying that the protections afforded to homeowners under HBOR also extend to widows and other surviving family members who have a legal interest in the property.

This clarification is important not only because of communication issues that widowed homeowners are facing, but also because some widows and widowers may have a reduction in their income when their spouse passes away. In these cases, they may need to both assume the loan and to seek a loan modification.

Currently, these homeowners can find themselves caught in a “Catch 22” if they seek a loan modification. Servicers inform them that they can’t be considered for a modification until they assume the mortgage. But, they won’t let them assume the mortgage unless they demonstrate that they can afford it. As a result, mortgage payments are missed, fees rack up, and foreclosure can be the unnecessary outcome.

Our community has already suffered so much from the foreclosure crisis,” Assemblymember Eggman said. “It’s outrageous that this continues to be a problem. Clearly we need to change the law to force lenders to deal fairly with those who are grieving the loss of a spouse or loved one.”

Kevin Stein, associate director of the California Reinvestment Coalition, one of the co-sponsors of the bill explains the importance of the bill: “While it’s a small clarification, this bill could make a world of difference for a grieving spouse or other surviving family member. The Homeowner Bill of Rights is one of the strongest consumer protection laws in the nation, and this bill continues California’s trend of leading on the issue of protecting homeowners.”

Maeve Elise Brown, executive director of Housing and Economic Rights Advocates, also a co-sponsor of the legislation, comments: “Attorneys from my office have worked with a number of widowed homeowners as well as surviving children who are hitting a brick wall when trying to speak with their servicers. Even with our attorneys involved, we still see unreasonable delays and consumers getting passed around to multiple departments when asking for a simple thing like a mortgage statement. Nationally, there are10,000 baby boomers turning 65 every single day, and we appreciate Assemblymember Eggman’s leadership on addressing this problem.”

The California Reinvestment Coalition advocates for fair and equal access to banking and other financial services forCalifornia’s low–income communities and communities of color. CRC has a membership of over 300 nonprofit organizations and public agencies across the state of California.