Rights of Surviving Homeowners
What is SB 1150, and why do we need it? SB 1150 clarifies the responsibilities of a lender when a borrower dies and leaves surviving homeowner spouses, children or other heirs who wish to assume the loan, giving them a fair chance to take responsibility for the mortgage loan attached to their home. When a homeowner passes away, often a surviving spouse often owns and holds title to the home but is not named on the mortgage note. In the most common scenario, a surviving widow owns her home, but is not listed on its mortgage loan. She attempts to assume the loan and get information on the loan modification options, and faces a mortgage servicer who refuses to talk to the homeowner, creates a confusing labyrinth of processes, loses documents repeatedly, transfers responsibilities between multiple employees, gives inaccurate information, and finally forecloses on the homeowner without considering her for a loan modification. Currently, homeowners listed on the mortgage loan are protected against such behavior by the 2012 California Homeowners Bill of Rights. SB 1150 extends many of these rights to surviving homeowners not listed on the mortgage loan by requiring lenders to consider them for loan assumption or modification. Specifically, lenders must be requesting reasonable documentation of the death and the identity of survivors. Provide accurate information about loan assumption and foreclosure avoidance programs. Provide a single point of contact and specified follow-up communication. Allow a survivor to simultaneously apply for loan assumption and modification. Given current California housing prices, loss of a family home often SB 1150 is awaiting assignment to a policy committee, no action until March 20.