An Express Article from the California Land Title Association
Bulletin 11/12-100 - April 25, 2012
Senate and Assembly Democratic leaders announced the formation of a Conference Committee to address foreclosure issues and homeowner protections in the wake of the foreclosure settlement recently reached by Attorney General Kamala D. Harris.
Specific bills authored by the Attorney General’s office that are meant to address the foreclosure process were referred to policy committees where they met with substantial opposition on both technical and policy grounds. Using a conference committee by-passes the regular committee process and means legislators will only vote on what emerges from the conference committee. The legislative leadership announcing the plan believes that there is a narrow window of opportunity to pass major legislation and that a two-house conference committee provides the most comprehensive and timely mechanism to craft the legislation. The six member conference committee is made up of two Senate Democrats and one Senate Republican and two Assembly Democrats and one Assembly Republican. The members include the chairs of the Senate and Assembly Judiciary and Banking Committees.
The California Land Title Association has been critical of pending legislation due to its impact on the availability of title insurance following foreclosures and the potential for increasing judicial involvement in a non-judicial process. Strong bona fide purchaser protections are critical to any legislation since many of the provisions being discussed involve off record requirements prior to permitting a foreclosure and ban foreclosures while modification requests are pending.
Legislation could also result in significant changes to the Trustee Sale Guarantee based on new foreclosure requirements. Another concern receiving scant attention is the extent to which any new legislation may result in the foreclosure process being classified as state action, thus raising potential constitutional issues. The CLTA is working closely with the housing shelter groups in Sacramento on the various proposals, including the California Bankers Association, California Mortgage Bankers Association, United Trustees Association and the California Escrow Association.
The Conference Committee is expected to complete its work within the next few weeks. Legislators will be asked to case procedural votes early next week to place a legislative vehicle into the conference committee.