Wouldn’t News Be If the Democratic Majority Assembly Voted it Down?
Assembly Passes Corbett Bill Protecting Struggling Homeowners, Borrowers
SB 426 Clarifies Status of Debts Following Foreclosure
SACRAMENTO – Legislation that strengthens existing deficiency protections for borrowers after losing their homes in foreclosures passed from the Assembly floor earlier today (June 24, 2013).
Authored by Senate Majority Leader Ellen M. Corbett, a Hayward Democrat, SB 426 specifically prohibits deficiency collections and adverse credit reporting on non-recourse loans following a non-judicial foreclosure.
In spite of existing anti-deficiency protections for residential borrowers in California, some creditors and debt collectors still attempt to collect debts by non-judicial means after a foreclosure. Also, when these debts are reported as delinquent on credit reports, borrowers have a much more difficult time rebuilding their credit after a foreclosure.
“SB 426 clarifies state law to ensure that Californians can move ahead following a foreclosure. It is critical that Californians that have already suffered the personal loss of a foreclosure are protected from ongoing negative credit impacts or attempts to improperly collect on the original debt,” Sen. Corbett said. “As a lead author of the California Homeowner Bill of Rights, I fully appreciate the need to continue to protect homeowners and borrowers during the mortgage and foreclosure process. I thank my Assembly colleagues for supporting this important legislation.”
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