This new California law became effective on January 1, 2013. You could incur penalties up to $7,500 per mortgage if you don’t review documentation and have “competent and reliable evidence” to prove it.
The California Assembly Bill 278, commonly referred to as the “Homeowner Bill of Rights” calls for documents recorded by or on behalf of a mortgage servicer in connection with a foreclosure, including a declaration, notice of default or sale, assignment of a deed of trust or a substitution of trustee, must be accurate and complete and supported by competent and reliable evidence.
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Before recording any such documents, mortgage servicers must ensure they have reviewed competent and reliable evidence to substantiate the borrower’s default and the right to foreclose.
Nationwide Title Clearing, Inc. offers property report services that provide its mortgage servicer clients with the competent and reliable evidence they need, as well as the images necessary to substantiate that such evidence was obtained.
Use this checklist to evaluate your existing process in California.
HOW THOROUGH IS MY ASSIGNMENT REVIEW PROCESS?
- Is an assignment review currently being conducted for all California loans once they are referred to default?
- If so, does the review include a search of land records for the mortgage/deed of trust and all recorded assignments to identify what’s on public record?
- Does the review include a documented report to identify the assignment chain and copies of all documents?
- Does the report constitute competent and reliable evidence?
- What process do you have in place to provide evidence that you are in compliance with this new law for all California loans in default?