California "Homeowners Bill of Rights" passed into law.

The housing crisis was created by a huge number of theoretically independent decisions that optimized the short term gain of a very select group of people and companies at the expense of literally the world. Among these ill-conceived decisions were rules and procedures maintained by the banking industry that greatly exacerbated the ongoing problems. Among these are/were policies that separated the functions of loan modifications, short sale negotiations and foreclosure process into separate departments with little or no communication set up between them … and no consistent set of criteria as to how to operate or treat the consumers in distress. Some of that will change with the passage of the Homeowners Bill of Rights. The following is a brief summary of the law taken from the California Assocication of Realtors online newsletter:

California Homeowner Bill of Rights signed into law
California Governor Jerry Brown signed into law yesterday the Homeowner Bill of Rights to help struggling Californians keep their homes. This law aims to avoid foreclosure where possible to help stabilize California’s housing market and prevent the other negative effects of foreclosures on families, communities, and the economy. The new law will generally prohibit lenders from engaging in dual tracking, require a single point of contact for borrowers seeking foreclosure prevention alternatives, provide borrowers with certain safeguards during the foreclosure process, and provide borrowers with the right to sue lenders for material violations of this law.

Making sense of the story

The Bill of Rights prohibits “dual track” foreclosures that occur when a mortgage servicer continues foreclosure while also reviewing a homeowner’s application for a loan modification.
Under the new law, homeowners must be provided with a single point of contact when negotiating a loan modification.
It expands notice requirements that must be provided to a borrower before taking action on a loan modification application or pursuing foreclosure.
Additionally, the bill allows injunctions against foreclosure until violations are corrected and permits civil penalties against servicers that file multiple, inaccurate mortgage documents or commit reckless or willful violations of law.
These new laws make California the first state in the nation to take provisions in the National Mortgage Settlement, which covered the nation’s five largest mortgage loan servicers, and apply those rules to all mortgage servicers.
The law will go into effect January 1, 2013.