In the wake of the recent multibillion-dollar settlement reached between the nation's largest mortgage lenders and a number of state attorneys general, California has become the first state to write much of the settlement agreement into law.
Provisions in the bill strictly ban brokers and lenders from starting the foreclosure process on borrowers while negotiating the terms of their home loans. In addition, the practice of automatically approving forecloses in bulk, known as robo-signing, is also strictly forbidden.
"They [borrowers] will now have a system that will offer them transparency and fairness," California Attorney General Kamala Harris told the Associated Press.
While the bill passed through the state's Assembly and Senate with ease, Governor Jerry Brown has yet to publicly announce if he supports the legislation, but experts doubt that Governor Brown will veto the initiative.
However, the legislation did not pass without some resistance. Specifically, a number of banks, mortgage lenders and other real estate groups feel the bill would be a burden and prevent them from further expanding their books of business.