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May 8, 2022 - Pico Rivera, CA – Senator Archuleta’s bill SB 1323 to require lenders in foreclosure proceedings to hire a realtor and sell the secured property for its appraised value on a multiple listing service has passed the Senate Judiciary Committee. This would allow the defaulted homeowner to be paid for their full savings in home equity in every applicable foreclosure.
“Foreclosed homeowners are low-income, often elderly, immigrant, or disabled members of California’s most vulnerable communities. For members of these communities, their home is often their only asset, and home equity is their only lifetime savings. The loss of even a single dollar of this equity is irreplaceable, putting the consumer at increased risk of poverty and homelessness. The cumulative taking of billions of dollars of home equity from these consumers is inhumane, it puts once housing stable, but low-income, people at risk of homelessness, and it inhibits social mobility of low-income families.”
During a foreclosure, a quarter of foreclosed California homeowners have their properties sold at auction for over 30% less than actual market value of the property. A tenth are sold for under 52% of market value. One in twenty foreclosed California homeowners have their properties sold at auction for over 70% less than the actual market value of their property. This number represents an average of over $376,000. California must take action to ensure that these unfortunate families do not lose the accumulated equity in their property.
Home ownership is the primary savings vehicle for low- and middle-class households in the United States. For a family without liquid funds to pay their mortgage, their accrued home equity in their property may be the only savings they have. It is necessary to preserve that equity for families that are going through a foreclosure.
“The loss of a home is already one of the most traumatic events that can happen to an individual and their family. In the unfortunate event that a house does go into foreclosure, the homeowner should not be punished further by the lender selling the house for well under its value. I remain committed to this bill and legislation protecting the primary savings vehicle for low- and middle-class households in the California because the accrued home equity in a homeowner’s property may be the only savings they have.”
Senator Bob Archuleta represents the 32nd Senate District, which includes portions of Los Angeles County and Orange County. He is Chair of the Senate Committee on Military and Veterans Affairs, Chair of the Select Committee on Hydrogen Energy, and member of the Senate Select Committee on California, Armenia and Artsakh Mutual Trade, Art and Cultural Exchange.
Source:Senator Bob Archuleta
