Sacramento, CA – May 29, 2015 – (RealEstateRama) — The California Chamber of Commerce is holding its annual “Capitol Summit” meeting this week, and two statewide nonprofits are calling on the Chamber to reverse its position on legislation that would protect widowed homeowners from unnecessary foreclosures.
Assembly Bill 244 (Eggman) would clarify that widowed homeowners are also protected by the California Homeowner Bill of Rights. This clarification is necessary to protect surviving spouses who have a legal interest in a home but who weren’t listed on the mortgage. The California Chamber of Commerce placed AB 244 on its “jobs killer” list earlier this year in an attempt to scare legislators from voting for it.
Despite federal guidance, mortgage servicers continue to stonewall surviving spouses after the death of a loved one. Servicers refuse to speak with them, give them multiple mixed messages about how to save their home, and create other unnecessary obstacles during an already difficult time for a homeowner.
Laura Coleman Biggs, who lives near Los Angeles, is an example of why AB 244 is needed.
After her husband passed away in 2003, Ms. Biggs continued paying the mortgage for ten more years, until she had trouble paying property taxes. She sought help from her servicer- who initially agreed to provide a modification, but then reversed its decision upon learning her husband had passed away. The servicer claimed it couldn’t help her because he was the only one listed on the mortgage, despite her having a legal interest in the home.
She faced foreclosure in December 2013, nine days before Christmas, which was postponed only after a media report about the runaround she was receiving from her servicer. In April this year, an attorney for Ms. Biggs discovered that her deceased husband had purchased insurance to pay off the house in case he died. Neither Bank of America nor her subsequent servicers ever told her about this insurance, which should have paid off the home when he died. Her servicer had moved to foreclose on her and the equity she had built up in her home, and the foreclosure likely would have happened absent the media attention and legal assistance she received.
Kevin Stein, associate director of the California Reinvestment Coalition, a co-sponsor of AB 244, explains: “We’re at a loss to understand how protecting widows like Ms. Biggs from foreclosure is a ‘jobs killer?’ Whose job is being killed? Lawyers whose job is to foreclose on grandmas? Ms. Biggs’ story is outrageous, and unfortunately, it isn’t unique. AB 244 would prevent these sorts of stories and ensure that all widows are protected from unnecessary foreclosures.”
Maeve Elise Brown, executive director of Housing and Economic Rights Advocates, a nonprofit law firm that is co-sponsoring AB 244, comments: “Seniors living in California should be protected from run-arounds, red-tape, and improper foreclosures that are banned under the Homeowner Bill of Rights. The Chamber needs to remove AB 244 from their jobs killer list and the head of the Chamber should apologize.”
OneWest Bank Merger: The Chair of Chamber of Commerce, Joseph Otting, is also the head of OneWest Bank. OneWest is seeking to merge with another bank, CIT Group, forming a Systemically Important Financial Institution, but its foreclosure track record on both regular and reverse mortgages has been widely criticized.
OneWest bank proposed to merge with CIT Group in 2014. However, in response to 21,000 people opposing the merger and over 100 state and national organizations opposing the merger, a public hearing about the merger was held in February 2015.
At the hearing, dozens of people and organizations testified against the merger. Surviving family member testified about the many problems they encountered working with OneWest Bank and its subsidiary, Financial Freedom, which is a reverse mortgage servicer.
Surviving spouses and adult children cited multiple mixed messages, a lack of a single point of contact, lost paperwork, and a number of other problems they encountered with Financial Freedom after the death of a loved one. The Department of Housing and Urban Development (HUD) announced a policy for reverse mortgage servicers working with surviving spouses in January, but subsequently rescinded the policy.
The testimony of surviving widows and other family members is available on the California Reinvestment Coalition website: Surviving Heirs Testify About Experiences with Financial Freedom.
More information about the CIT Group and OneWest merger and OneWest’s foreclosure track record is available at www.badbankmerger.com.